Another rate cut hinted an imminent completion of interest rate liberalization

The People’s Bank of China (PBoC) cut the benchmark interest rates last Sunday, the third time since November 2014 and effective from May 11. Both the one-year benchmark lending and deposit rates were trimmed by 25 bps (to 5.1% and 2.25% respectively). The PBoC expanded the permissible floating range of customer deposit rates to 50% above the benchmark rates.

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