China cuts interest rates to warm up real economy  

中国释放强烈“货币信号”力挺经济“回温”

中国银行国际金融研究所副所长宗良接受中新社记者采访时表示，“信号非常明确”，央行就是要向市场表明支持实体经济、有效降低企业融资成本的决心。

Beijing (CNS) -- The People's Bank of China's unexpected reduction of interest rates on Thursday is a clear sign of the PBC endorsement of real economy stimulation, and its determination to lower the costs of financing business activity, commented Zong Liang, Deputy General Manager with the Institute of International Finance, Bank of China.

The asymmetric interest rate cuts will stimulate investment and consumption, serving as a countermeasure to economic slowdown, Zong added.

The reduction policy came earlier than expected, said Chu Jianfang, chief economist with CITIC Securities, mainly due to huge economic downside pressure in the second quarter. The policy is aimed to attract market capital to real economy sectors in view of the fact Q2 GDP growth is expected to go below 8 percent.

Lu Zhengwei, chief economist at Industrial Bank, echoed Chu's opinion, adding that this interest rate policy is a relatively gentle measure that only works in the long term, and suggesting more emphasis put on the constraint of supervisory indexes such as loan-to-deposit ratio and capital adequacy ratio on credit loans.