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Cross over: What's the next step for Europe

07-06-2012 10:15 BJT

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The PBOC caught markets by surprise, cutting interest rates for the first time in less than a month. Effective tomorrow, the one-year deposit rate will go down 25 basis points, and the one-year lending rate will be cut by 31 basis points. Full story >>

The European Central Bank has cut borrowing costs to a record low today, as widely expected to support a deteriorating eurozone economy and to complement measures agreed by government leaders to tackle the debt crisis. Full story >>

The Bank of England further eased its monetary policy earlier today, to inject some much-needed momentum in Britain’s recession-hit economy. Full story >>

For more analysis and the development on China’s new round of interest rates cut, I’m joined by Professor Liu Baocheng from the University of International Business and Economics here with me in Beijing, and the lovely Melanie Ralph in London.

Q1. First question for Professor Liu, this is the second rate cut in China in less than a month. It does seem that policymakers are quite concerned about the extent of the slowdown here?

Q2. Melanie, drastic action from China’s central bank and the ECB is also slashing rates down to levels not seen before - how are the markets reacting to all this excitement, and what’s next for the crisis?

Q3. Professor Liu, I want to ask you about the effectiveness of these rate cuts - it’s a little surprising that the PBOC has chosen to go with another interest rate cut rather than a triple R cut as many were predicting - a cut in reserve ratios would arguably pump more liquidity into the markets - what’s behind this reasoning, and should we still expect another triple R cut to come?

Q4. Melanie, finally, the UK also in the spotlight today about the Bank of England meet - how’s that all looking compared to the rest of Europe?

Thank you both for joining us. That’s professor Liu from the University of International Business and Economics, and Melanie Ralph reporting in London.

 

 

Editor:Zhang Rui |Source: CNTV.CN

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