China's central bank and the European Central Bank announced reduction in interest rates amid slowing economic growth rates in the economies.
The moves in each region are not coordinated, but indicate the increasing concern over the slowdown in the economy and highlights the role central banks are playing to boost the economic growth.
China's central bank had surprised the market with a reduction in interest rate by nearly a third of a percentage point. The authorities also changed laws to reduce borrowing rates for companies with good credit by a further three fifth percentage point.
On the other hand, the ECB cut its benchmark interest rate to its lowest level indicating increasing concerns in the governing circles in Europe to boost the economic growth and make more credit available to the market.
The unemployment rate in the world’s largest economy, the US has risen for the first time in almost a year in the month of May as only about 69,000 jobs were added in the month, according to the figures released by the government. Meanwhile, China reported a slowdown in the manufacturing sector as the purchasing managers’ index of Chinese manufacturing activity fell more than expected.
The slowdown has prompted expectations that the central banks around the world would take actions to boost growth and increase liquidity.
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