The People's Bank of China cuts interest rates for the first time in 7 months to support the economy.

The People's Bank of China has cut its key interest rates for the first time in seven months, as part of efforts to support economic growth, benefiting from the improved performance of the yuan and reduced global trade tensions.

The decision included reducing the interest rate on short-term loans (for one year) by 10 basis points to 3%, while the interest rate on medium-term loans (for 5 years) dropped to 3.5%.

This adjustment follows the last cut made by Chinese monetary authorities in October, which was 25 basis points.

Short-term interest rates are mainly linked to corporate and household loans, while medium-term rates directly impact mortgage loans.

This move is part of a stimulus package announced by the Chinese government earlier this month, which also included reducing bank reserve requirements and adjusting interest rates on supported housing loans.

On the other hand, economic analysts expect the continuation of monetary easing in the near future, with expert Zhiqun Huang from "Capital Economics" predicting an additional 40 basis points cut in lending rates by the end of the year.

Meanwhile, analyst Alan Fournier from "Danske Bank" revised his yuan to dollar exchange rate forecast to 7.15 within a year, attributing it to improved trade conditions and China's focus on stabilizing the national currency.