China has again loosened monetary policy on the same day manufacturing statistics showed activity hitting an 11-month low.
This time the central bank, the People’s Bank of China, cut the seven-day bond guidance rate to 3.55% from 3.65%.
The bank has been easing lending, and has reduced the cash level banks must keep in reserves, as the economy slows. China has revised the official economic growth target to 7% from 7.5%.
Last month the benchmark lending rate was cut 0.25 of one percentage point to 5.35%, the second cut in three months.
Today China’s flash manufacturing PMI hit an 11-month low, dipping to 49.2. The market was expecting a read of 50.2, which would signal a slight expansion, so this is a significant miss.