China's PBOC cuts interest rate of medium-term lending facility

The decision followed two similar policy rate cuts announced recently in the seven-day reverse repo rate and the standing lending facility rate.

About 237 billion yuan ($33.15 billion) was pumped into the market through the decision, a state-controlled news agency reported.

The country's value-added industrial output rose by 3.5 per cent year on year and retail sales of consumer goods went up by 12.7 per cent in May, according to the National Bureau of Statistics (NBS).

Fixed-asset investment went up by 4 per cent in the first five months, and the surveyed urban unemployment rate stood at 5.2 per cent in May.

NBS spokesperson Fu Linghui, who recently cited some bright spots from increased production, recovering consumption and demand, resilient trade, stable employment and prices and steady high-quality development, also acknowledged that challenges remain in a complicated global environment.

Some production and demand indicators have witnessed slower growth due to a high base a year ago, and the foundation for the economic recovery is not solid.

"Concerted efforts should be made to ensure effective policy implementation, invigorate business entities and stabilize market confidence," Fu said.

A recent government circular listed 22 major tasks to reduce costs for businesses this year.

Despite the challenges ahead, China, with its solid material and technological foundation, huge market and stronger innovation capacity, is capable of and confident in overcoming difficulties and promoting the recovery and improvement of the economy, Fu added.

ALCHEMPro News Desk (DS)