People's Bank of China Signals Benchmark Rate Cut Amid COVID-19 Economic Slowdown Concerns

[Asia Economy Reporter Kwon Haeyoung] The People's Bank of China has hinted at the possibility of lowering the benchmark interest rate amid growing concerns over economic slowdown caused by the spread of COVID-19.

On the 22nd, Liu Guochang, Deputy Governor of the People's Bank of China, said in an interview with Financial News, "the deposit benchmark interest rate plays a role like a stone that balances the domestic interest rate system and should be maintained in the long term," but added, "In the future, based on the State Council's judgment, adjustments will be made at an appropriate time and with appropriate intensity considering the basic conditions such as economic growth and price levels."

This statement is interpreted as suggesting that the People's Bank of China may soon lower the benchmark interest rate to mitigate the economic impact of the COVID-19 crisis. China has maintained the one-year deposit benchmark interest rate and loan benchmark interest rate at 4.35% and 1.5%, respectively, for more than four years since October 2015.