The Chinese central bank has announced that it would cut interest rates by two points, bringing the interest rate to a historically low level.
The one-year interest rate will be cut from 3.1 percent to 3 percent. The five-year interest rate will be cut from 3.6 percent to 3.5 percent, the central bank announced on Tuesday.
China’s economic growth is expected to be reduced by the trade war with the United States. Spending in China is already declining, which is also slowing economic growth.
The goal of the interest rate cuts is to stimulate growth.
“Today’s cuts will probably not be the last this year,” says China economist Zichun Huang at Capital Economics in an analysis.
China has set a growth target for gross domestic product of around five percent.