China cuts interest rate, banks’ reserve requirements
Wednesday, November 26, 2008 8:08
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China Wednesday reduced both its lending and borrowing rates by 1.08 percentage points in an effort to ease the money supply. The Chinese central bank’s one-year yuan lending rate is now 5.58%, while the rate on one-year yuan deposits rate has been lowered to 2.52%.
The central bank also reduced bank reserve requirements by 1% for six big banks and 2% for smaller banks.
The benefit of this two tier rate cut is tilted toward the smaller sectors of the economy.
(In the US we just let the little guys go bankrupt so the big guys can gobble them up at fire sale prices)
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