China cuts its interest rates

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By Caroline Namanda

  China has cut its one year benchmark interest rates by 0.25% to 4.35%. The Chinese Central Bank also cut the ratio of the Chinese currency that it’s banks to hold. China also hopes that looser monetary policy; in the shape of cheaper money will help it hit its growth target of 7% for 2015. The changes will come into effect on Saturday. Lower interest rates tend to stimulate borrowing by consumers and businesses, and could contain the slowdown but there is risk the move could lead to build up of debt – China could be in danger of having a financial crisis.