China Cuts Borrowing Rates Again in Bid to Juice Recovery

China's central bank reduces banks’ loan prime rates to reignite the economy, but economists warn that more drastic measures may be needed given high debt levels and uncertain growth prospects.

June 20, 2023 . 10:36 AM

1 min read

Chinese banks have cut benchmark interest rates on loans to households and businesses to reignite the economic recovery.
Economists warn that households and businesses have shown little appetite to borrow due to already high debt levels and uncertain growth prospects.
The Chinese government is considering a package of policy measures, including tax cuts, to promote sustained economic growth.
The government is also considering the issuance of special treasury bonds worth roughly one trillion yuan to help fund new infrastructure investment.
To foster a stronger recovery, economists suggest looser rules to encourage people to buy more than one home and vouchers or similar measures to finance household consumption.