China cuts interest rates, global markets weigh move


Aug 26, 2015 (LBO) – China cut interest rates early on Wednesday supporting turbulent markets which plunged sharply in recent days on worries the large economy was slowing down.

China’s stocks swung in both directions as markets weighed the impact of the fifth interest rate cut since November.

The PBOC said it will cut the one-year lending rate by 25 basis points to 4.6 percent and lowered the required reserve ratio by 50 basis points for all banks.

China shares are now down 3.7 percent as measured by the Shanghai Composite Index. Nikkei is up 0.48 percent, and the FTSE 100 rose 3 percent on Tuesday.

A 442-rally on the Dow Jones Index disappeared and the market closed down 205 points on Tuesday.  In the last six trading days, the Dow has lost 11 percent or 1,900 points.