China Central Bank Cuts Interest Rate, Reserve Requirement to Stimulate Economy

China's central bank announced cuts in both interest rates and in the reserve-requirement ratio, in the latest efforts to boost the domestic economy amid worries over the deepening global financial crisis. The People's Bank of China said that the deposit and lending rates will be lowered by 0.27 percent on Thursday and the reserve-requirement ratio will be cut by 0.5 percent on Oct. 15.

 (photo from chinadaily.cn)

Federal Reserve, Six Other Central Banks Slash Interest Rates to Cope with Crisis

The Federal Reserve, together with six other major central banks from around the world, slashed interest rates yesterday to cope with the current financial crisis. The U.S. central bank decided to lower its target for the federal funds rate 50-basis-points to 1.5 percent. It also approved a 50-basis-point decrease in the discount rate to 1.75 percent. In Europe, the Bank of England slashed its rates by half a point to 4.5 percent and the European Central Bank cut its rates by half a point to 3.75 percent. The central banks of China, Canada, Sweden, and Switzerland also took similar actions.

IMF: World Economy to Slow Sharply, Led by US

In a World Economic Outlook released yesterday, the International Monetary Fund predicted that the world economy will sharply show down this year and in 2009, with the United States likely sliding into recession. The IMF also estimates that China's economic growth will suffering a minor decrease to 9.7% in 2008 and to 9.3% in 2009.