China Cuts Interest Rates

Last week, it was the Fed. This week it's China.

For the fifth time in three months, China lowered its one-year lending rate, this time to 5.31 percent -- a .27 percent cut. Deposit rates were cut by the same amount, to 2.25 percent.

Analysts were expecting deeper cuts. However, media reports out of China indicate that the country is planning a second stimulus package to jump-start consumer spending. China's exports are also hurting because of less U.S. demand.

“Monetary policy is now playing a supportive role to the main show in town: fiscal stimulus,” Stephen Green, head of China research at Standard Chartered Bank Plc, told Bloomberg News service.

-- Michael S. Rosenwald