China ratcheted up its effort to reinvigorate its economy yesterday by cutting a key policy rate and interest paid on bank deposits.
The move coincided with a downturn in world stocks, extending losses in Chinese markets that have declined this year while share prices soared in many other countries.
The People’s Bank of China said it cut the lending rate for one-year medium-term policy loans by 20 basis points to 2.3 percent. That is the biggest rate cut since China’s economy was slammed by the COVID-19 pandemic in 2020.
Photo: AP
The rate on seven-day loans was reduced to 1.7 percent.
Yesterday’s rate cut also helps relieve pressure in the bond market since the central bank also has cut collateral requirements for its medium-term lending facility, enabling lenders to sell bonds normally used as collateral.
Major state-run banks cut deposit rates to relieve pressure on their finances, reducing the rate paid on one-year fixed deposits by 10 basis points to 1.35 percent, Xinhua News Agency reported, citing official rates released yesterday by the country’s “Big Four” banks: Industrial and Commercial Bank of China (中國工商銀行), Agricultural Bank of China (中國農業銀行), Bank of China (中國銀行) and China Construction Bank (中國建設銀行).
The banks cut deposit rates three times last year and this was the first reduction for this year, it said.
Earlier this week, the central bank cut several of its other lending rates, sticking to a cautious approach to stimulating the economy.
Growth in the world’s second-largest economy slowed to 4.7 percent in the second quarter, down from 5.3 percent in the first quarter.
The flurry of rate cuts this week followed a major policy-setting meeting of the ruling Chinese Communist Party last week that laid out ambitious plans for reforms in many areas of the economy, but did not spell out any specific plans for stimulus driven by government spending.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
SEMICONDUCTORS: Taiwan is the company’s fastest-growing market due to growing demand for advanced equipment, Advantest Taiwan chairman Alex Wu said Advantest Corp, the world’s largest chip testing equipment supplier, yesterday said that stronger-than-expected demand from Taiwan Semiconductor Manufacturing Co (台積電) has stretched to far longer than the expected six months, driven by a surge in demand for artificial intelligence (AI) and high-performance-computing (HPC) applications. Normally lead times range from three to four months, but as a majority of AI and HPC chips are packaged using advanced packaging technology, chip-on-wafer-on-substrate, it requires a longer and more complex testing process to ensure every semiconductor die works well before being packaged together, Advantest said. As a result, demand for Advantest’s equipment is running high, the
A Thai investigation into discounts from China’s BYD Co (比亞迪) would continue despite a cash-back program from its distributor in response to a backlash from consumers who felt they overpaid for their electric vehicles (EV), a senior Thai official said on Friday. Thailand, a regional auto assembly and export hub, is BYD’s largest overseas market, where it is the top-selling electric vehicle brand. BYD last month opened a factory in Thailand, its first in Southeast Asia. Rever Automotive, BYD’s Thailand distributor, this week announced a cash-back program and discounts at charging stations until March next year. Existing BYD customers can receive cash back