Xi Faces More Tough Choices After Surprise China Rate Cut
- PBOC makes steepest reduction to 1-year MLF rate since 2020
- Latest property sector woes spark fears of contagion risks
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President Xi Jinping has resisted pulling the trigger on a major stimulus to revive the world’s second-biggest economy. The grim market reaction to a surprise rate cut shows investors want to see him take much bolder steps.
The People’s Bank of China on Tuesday lowered the rate on its one-year loans — or medium-term lending facility — by 15 basis points to 2.5%, the steepest cut in three years. The move came shortly before the release of July data that showed weak consumer spending growth, sliding investment and rising unemployment.