BEIJING, Sept. 15 (UPI) -- China's central bank dropped its key lending rate by 0.27 percent to 7.2 percent, a surprise move that underscores the global financial crisis, analysts said.
The bank changed the rates for the first time in six years and within hours of learning New York investment bank Lehman Brothers Holdings announced it would file for bankruptcy and Merrill Lynch & Co. had agreed to sell itself to Bank of America Corp., The New York Times reported Monday.
"I think the most important thing China should do … is to immediately give up on the tight monetary policy," Zhao Xiao, an economist at the University of Science and Technology of Beijing told the Times.
The bank's announcement came Monday while China's financial markets were closed for a holiday.
The change applies to the bank's one-year lending rate. Deposit rates were left unchanged at 4.14 percent.
The bank's statement explaining the move didn't mention inflation, which has settled to an annual rate of 4.9 percent. Instead, it mentioned the need to "maintain the steady and fast growth of the national economy."
