International ETFs Gain The Most From China Rate Cut

China turmoil has been playing foul in the global markets over the past few months. The crisis deepened early this month when the government devalued its currency, the renimbi, by 2% to ramp up exports. After that, sluggish manufacturing data fueled fears over the persistent slowdown in the world’s second largest economy with its concomitant impact on global growth.

China-led fears have hit stock markets worldwide with matters turning from bad to worse over the past four days. China’s main index plunged nearly 22% in the same period, wiping off trillions of dollars from the Chinese stock market. This represents the worst stock market rout in almost two decades. In order to fight against the malaise and arrest the crisis that rattled the global economy, the People's Bank of China (PBOC) announced another round of monetary easing (read: Best ETF Strategies to Survive Market Turmoil).

The central bank slashed the one-year lending rate by 25 bps to 2.75%, the deposit rate by 25 bps to 1.75% and reserve ratio by 50 bps to 18%. Notably, this is the fifth interest rate cut in nine months.

Market Impact

1 2 3 4
View single page >> |

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.