China cuts interest rate to 5.1% that is 25 basis lower from the earlier benchmark. IMF declared that China may attain a GDP growth of 6% in this year (2014-2015). China’s own government currency valuation committee also agreed with the prediction of IMF. In order to boost the economic growth China’s central bank has lowered the interest rate and cuts it to 5.1% today.
This is the third time in six months that China cuts the interest rate. But why they have taken this liberal measure where almost every country goes for increasing the rate of interest. China is trying to spur its economic growth in a rapid time. That’s why government has taken up some decisions like lowering commercial taxes and internal duties imposed on commercial logistics.
China is experiencing a great depression in its construction sector specially in housing sector. This sector has cooled down after the bubble burst. China has lowered the rate of interest for common people who is willing to take loan for buying new space for personal and commercial use. Due to the speculative demand bubble, China’s housing sector is getting down and it is loosing impression on economic growth.
According to the government news channel, government of China is planning to implement some other industry friendly decisions to accelerate the growth and cutting interest rate is one of them.