2020.04.1505:55:00UTC+00China Central Bank Trims Medium-Term Borrowing Cost

China's central bank reduced its medium-term borrowing cost on Wednesday, in an attempt to mitigate the downturn caused by the coronavirus pandemic.

The People's Bank of China on Wednesday said it trimmed the one-year medium-term lending facility, or MLF, rate to 2.95 percent from 3.15 percent. The bank injected CNY 100 billion through the MLF operation.

In March, the PBoC had reduced the reserve requirement ratio for qualified banks and the reverse repo rate.

The latest central bank decision came ahead of the release of GDP data. The National Bureau of Statistics is set to publish quarterly national accounts and major economic indicators on April 17.

The International Monetary Fund said China, where the Covid-19 pandemic started, is forecast to grow a modest 1.2 percent this year, but rebound with a growth surge of 9.2 percent next year.

According to World Economic Outlook, global GDP is set to contract 3 percent this year, thanks to the lockdowns imposed by countries across the world.

The PBoC has taken yet another step to help banks and borrowers weather the ongoing economic weakness and is preparing to lower interest rates further in the coming months, Julian Evans-Pritchard, an economist at Capital Economics, said.