Beijing, China (BBN)-China has cut its main interest rate by 0.25 percentage points to 4.6 percent after two days of stock market turmoil.
It’s the fifth interest rate cut since November.
The People’s Bank of China also cut banks’ reserve requirement ratio by 0.5 percentage points. The moves take effect from Wednesday, the bank said.
The move has boosted European share prices further, with the FTSE 100 in London jumping 3.3 per cent after the China move.
In Germany, the Dax index was up by 4.4 per cent and in France, the Cac was ahead by 4.6 per cent.
China’s falling stock market had hit markets around the globe on Monday, and – although Asian markets were again hit overnight – European stocks had opened in a more optimistic mood on Tuesday.
The People’s Bank said that the interest rate cut was to reduce “the social cost of financing to promote and support the sustainable and healthy developments of the real economy”.