The Bank of China has cut its benchmark lending rate to record low and also lowered the reserve-requirement ratios for lenders. The decision came after sell-offs of Chinese stocks during the couple of weeks. The reason is also to add cash and support the economy which has showed signs of poorer growth performance. The one-year rate was reduced by 25 basis points to 4,85 per cent. Many economists expect the Chinese GDP annual growth to decrease under 7 percent during the second-quarter.
The Financial Markets ended lower on Friday in New York and in London. On the other hand the German DAX-indeksi was slightly up, with a year return of over 17 percent. The Shanghai Shenzhen CSI 300 -index has gained over 100 percent this year.
There has been growing speculation also when the US Federal Reserve will act regarding the bond buying and rate hikes. According to Goldman Sachs analysts they predict that the Fed will rise the rates late next year. The estimate was published last week.
In Greece, the decision to make a referendum on spending cuts on July 5th 2015 has caused concerns among EU-finance ministers. According to media sources, EU is now focusing more how to avoid financial turbulence during next week.
The European Central Bank has increased Emergency Liquidity Assistance weekly to Greek central bank to funnel the lenders.