On Saturday, the 17th of August 2019, the People’s Bank of China (China’s Central Bank) had unleashed a core interest rate overhaul policy in a bid to lower borrowing costs for small- and medium-scale businesses aimed at supporting a sluggish economy, grievously hurt by a grueling war over tariffs against the world’s largest economy, United States.
In point of fact, recent reform of China’s Central Bank came forth a few days after China’s industrial activity fell to a 17-year low, which eventually prompted the People’s bank of China to ease policy further including a reform of its core interest rate.
Besides, in its Saturday’s (August 17th) statement, the People’s Bank of China (China’s Central Bank) had been quoted saying that it would step up efforts to improve its financial mechanisms including a possible lowering of loan prime rate (LPR) aimed at curbing its key interest rate further for the Chinese companies as a part of a broad-based market reform amid heightening recession risks.
Concomitantly, addressing to a market-based reform to lower borrowing costs, the Chinese Central Bank had been quoted saying in its Saturday’s (August 17th) statement published on its website, “By reforming and improving the formation mechanism of LPR, we will be able to use market-based reform methods to help lower real lending rates.
(The People’s Bank of China) will deepen market-based interest rate reform, improve the efficiency of interest rate transmission, and lower financing costs of the real economy. ”