Markets

Stocks Shoot Up After Shock Chinese Rate Cut—And This One Is A Big Deal

By Gus Lubin and Joe Weisenthal
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people's bank of china, China central bank
AP Images

China cut benchmark interest rates by 25 basis points.

You hear a lot about Chinese rate cuts, but this is a different one.

Most rate cuts are cuts to the reserve requirement ratio, which is a modest move.

This time it's the first straight up rate cut since 2008.

Futures are ripping higher on the news...

But this is a sign that growth is not happening at the pace that Beijing is looking for.

It will also let banks offer a 20% discount from the benchmark rate.

The news came out right at 7:00 AM ET, right when the Bank of England made its rate announcement. It did nothing.

The PBOC move continues the theme for the week: Central bank activity. The big show is later today when Bernanke speaks on the hill.

Click here to see 6 signs that Chinese growth is already stabilizing >

WATCH: What Today's Shock Chinese Rate Cut Really Means

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gus lubin
Gus Lubin
Gus worked at Business Insider from 2009 to 2017. Starting as an intern, he did a bit of everything, launching sections covering lifestyle, science, personal finance, military, and more, eventually serving as executive editor of Business Insider and editor-in-chief of Tech Insider.As a writer, some of his favorite stories looked facial bias, the philosophy of Peter Thiel, Chinese ghost cities, self-driving car ethics, the average family on earth, Wikipedia hoax-hunters, income inequality, bleak futurism, global communication patterns, and the worst hotel in New York.As an editor and executive producer, some of his favorite stories include photo essays from the Canadian tar sands to the streets of Cairo, features about Vine stardom and dog cloning, and a documentary on hacking the grid.Gus graduated from Dartmouth College. He interned at Boston Review, 826 Boston, and Yes! Weekly.
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Joe Weisenthal
Prior to joining Business Insider in October 2008, Joe was a correspondent for paidContent.org, as well as the Opening Bell editor at Dealbreaker.com. He previously was a writer and analyst for Techdirt.com, and before that worked as an analyst for money management firm Prentiss Smith & Co.He got started writing with his own infrequently updated blog TheStalwart.com. A graduate of The University of Texas at Austin, Joe's interests include Chinese food, chess and poker.The former Executive Editor, he left Business Insider in 2014.
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