For the first time in almost two years China’s central bank cut its interest rate as it sought to boost an economy that is grappling with COVID-19.
The People’s Bank of China reduced its rate by 10 basis points, despite the country’s economy expanding by 4 percent in the fourth quarter of last year, Bloomberg reported.
In a similar development, the US Federal Reserve signaled that it is pushing for a quicker tightening and normalization of monetary policy, with Goldman Sachs expecting the Fed to raise interest rates four times this year.
The euro area is also struggling with record high inflation, and pressure is piling up on the European Central Bank to act and mitigate these effects.
Driven by record exports, China’s economy grew by 8.1 percent for the 2021 full year, which more than satisfied the country’s objective of above 6 percent growth.
Expansion of industrial production also picked up pace in December, reaching 4.3 percent up from 3.8 percent in the previous month.
However, the world’s second largest economy experienced several issues in the second half of last year, including electricity shortfalls, a property crisis and COVID-19 waves which are also inducing an obscure outlook for the East Asian country.