SHANGHAI (Reuters) - China’s cut to its reverse repo rate should alleviate the shock to the real economy from a virus outbreak and is a good move to stabilize expectations and restore financial market confidence, a central bank adviser said on Monday.
Ma Jun’s comments followed an unexpected decision by the central bank for a cut of 10 basis points in the interest rate on reverse repurchase agreements.
They were published in Financial News, which is owned by the People’s Bank of China (PBOC).
Ma added that Monday’s reverse repo rate would also raise the possibility of a reduction of the Loan Prime Rate, the monthly fixing of which is set for release on Feb. 20.
Reporting by Winni Zhou in Shanghai, Zhang Lusha and Se Young Lee in Beijing; Editing by Clarence Fernandez