China’s economic decisions once again surprising investors. This time by not cutting an important interest rate. This comes on top of a floundering real estate sector and record high youth unemployment.
China has cut its one-year benchmark lending rate Monday as expected but surprised markets by keeping the five-year rate unchanged.
The five-year rate ties into mortgages. Something that surprised investors given the current housing sector troubles. The idea being a lower rate would increase spending, stimulating the economy.
That’s on top of China’s economy facing wider concerns over a rapidly weakening currency, as the yuan lost nearly 6-percent against the dollar this year, triggering concerns of capital flight.