"Surprising Rate Cut by China's Central Bank Aims to Boost Struggling Economy"

China's central bank, the People's Bank of China (PBOC), unexpectedly cut key policy rates for the second time in three months in an effort to boost the country's sputtering economic recovery. The move comes as credit growth tumbles and deflation risks rise, prompting the need for monetary easing measures. Analysts believe this rate cut opens the door for a potential reduction in China's lending benchmark loan prime rate (LPR) next week. The PBOC lowered the rate on one-year medium-term lending facility (MLF) loans to some financial institutions, injecting liquidity into the banking system. This move widens the yield gap with other major economies, putting pressure on the yuan and risking outflows.