Chinese economy shows signs of regression as interest rates are cut

Is your high street bank ripping you off

Leading economic experts in China have cut the country’s interest rates by 25 basis points. This is the latest effort taken by the government to boost the ailing economy.

Economic growth has stalled in China for the last few months. However, this is the first time that the Chinese central bank has slashed rates since 2008.

This surprise cut has caused a stir amongst the global stock markets and foreign investors might start to panic.

As the global economy is on the brink of falling into another recession, those who had pinned hopes on China’s economic stability are now faced with doubt.

In the first three months of the year, Chinese economic growth slowed to 8.1%, significantly less the figures which we saw in China’s glory days.

As a result of this, interest rates have been cut, Chinese lending will be held at 6.31% and a one-year deposit rate will be 3.25%.

Speaking to the Financial Times, economist Ken Peng stated: “Cutting the interest rate definitely shows that they are concerned about downside risks to the economy.”

The rapid economic decline is further represented by the fact that the People’s Bank of China increased interest rates three times last year, believing that the economy was on the mend.

Foreign exchange rates between China and other destinations are likely to be unaffected by the country’s interest rate cut. However, it would be advisable to make sure of this before attempting to transfer money to the country.

Transfer Money to China

If you are looking to invest in China, think carefully about how you will be transferring money to China. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are sending money to China– which you will inevitably have to do if you are looking to make a property investment, be sure to compare the market before you buy your overseas currency.

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