Beijing: China’s central bank has unexpectedly cut a medium-term interest rate by the most in more than four years, marking the latest move by authorities to boost economic growth.

The world’s second-largest economy has encountered severe headwinds in recent years, as a heavily indebted property sector, sluggish consumption and high youth unemployment weigh on confidence.

Beijing has introduced a host of measures in recent months in a bid to get it humming again, but a full rebound has so far proven elusive.

In a surprise move yesterday morning, the People’s Bank of China (PBoC) slashed the rate for its medium-term lending facility (MLF) - the interest for one-year loans to financial institutions - to 2.3%, from 2.5%.

The central bank typically makes MLF announcements on a predetermined day in the middle of the month.

The last time the rate was cut was in August but the latest is the biggest since April 2020. It comes after the PBoC cut two benchmark interest rates on Monday, as expected.

The country’s economy has failed to fully recover from the impact of tough anti-pandemic measures, which were lifted in late 2022. Chinese authorities have set an official growth target for this year of around 5%.

 - AFP