The People's Bank of China (PBoC), the country's central bank, cut its policy interest rate by 10 basis points (bp) on Monday, in an action it hopes will help foster the recovery of the country’s economy, still affected by its zero-covid policy and slowing GDP growth.

The PBoC says on Monday that it has conducted 400 billion yuan (US$59.2 billion) in its benchmark one-year medium-term lending facility operations at an interest rate of 2.75%, down from 2.85% a month earlier.

As well, the bank says it has lowered the interest rate of seven-day reverse repos from 2.1% to 2% in its 2 billion yuan worth of reverse repo operations on Monday, fully satisfying financial institutions' needs.

The rate cut is seen as a sign that the Chinese government is willing to maintain efforts to stimulate the economy despite rising global inflation concerns unlike, say, the US Federal Reserve, which has recently increased its interest rates.