Why China’s Interest Rate Cut Is a Really Big Deal.

CNBC 7 June 2012 | 8:50 AM

China’s surprise 25 basis point cut in benchmark lending rates on Thursday could signal the economy is slowing faster than previously thought. “The timing of tonight's rate cut suggests two things. Either inflation has eased to less than 3 percent already, or, growth is slowing sharply faster than policymakers' previous expectations,” Donna Kwok, economist for Greater China told CNBC. “We expect a more aggressive easing cycle ahead as we think the downturn is becoming more severe,” the firm wrote in a note to clients Thursday.
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