MUMBAI: The People’s Bank of China has kept its one-year medium-term lending rate unchanged at 7.5 per cent. However, to increase liquidity in the economy, the reserve requirement ratio has been reduced by five percent. For small banks, this deduction is half a per cent.
The resurgence in the Corona case was expected to reduce interest rates in China, which would have an impact on the economy. Reducing the reserve requirement ratio would add an additional 3 billion to China’s economy.
An estimated 400 million Chinese citizens have been subjected to various lockdowns due to measures taken to prevent the rapid spread of omicrons. The effect of the lockdown is starting to affect the economy of China.
Some 6 cities in China, which have an annual GDP of 2.50 trillion, have been subjected to some form of lockdown. This move is expected to reduce China’s GDP by 1.5 to 2 percent.
After achieving an economic growth rate of 7.10 percent in 2021, China expects GDP growth of 3.50 percent for the current year.