China cuts key rate for second time this year, more easing likely

There were further signs over the weekend that China is returning to a sense of normality.

Trains filled with Beijing residents returned from Wuhan, after many had been stranded there for 76 days of lockdown.

Now China is on a mission to get its economy back up and running too.

It cut its benchmark lending rate on Monday (April 20) to reduce borrowing costs for companies.

The one-year loan prime rate was lowered by 20 basis points, with the five-year rate trimmed by half that amount.

It was the second cut to the rate this year.

The Chinese economy shrank 6.8% in the first quarter from a year earlier as containment measures shut down factories and shops and put millions out of work

That was the first contraction since at least 1992, when quarterly records were first published.

While the country is restarting its economic engines, analysts say activity could take months to return to pre-crisis levels.

The likelihood of a global recession is adding to the pressure.

The Peoples Bank of China has stepped up policy easing since the outbreak intensified in mid-January.

And the government has announced a host of fiscal measures from cheap loans to tax cuts and special bonds to fund infrastructure projects.

But the Chinese central bank's response to the crisis so far has been less aggressive than many of its global peers, and more restrained than the massive stimulus it deployed during the global financial crisis.

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