China cut interest rates for the third time in six months on Sunday.
The People's Bank of China said that it was lowering its benchmark, one-year lending rate by 25 basis points to 5.1 percent from 11 May. It cut the benchmark deposit rate by the same amount to 2.25 percent.
However, while China tries to stimulate its domestic economy, it may be draining liquidity from global markets. From Bloomberg:
China’s foreign-currency reserves had their biggest quarterly drop on record in the first three months of the year and the yuan is trading at the closest to fair value since 2010, according Goldman Sachs Group Inc. That means less demand for assets in dollars and euros from the world’s biggest creditor.
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