FX.co ★ China bans negative news as yuan slides and stock market sinks

The People's Bank of China began to step up measures to stabilize economic indicators and the national currency. The fall of the yuan against the US dollar was the last straw, and the country's regulator decided to slash the benchmark interest rate by 1.5%. The world's second-largest economy has been experiencing turmoils lately. The scale of the economic downturn is stunning, and the country's authorities have banned the publication of negative economic news. However, the measure has not improved the indicators in any way. The Chinese currency and stocks have hit all-time lows, and imports have slumped along with consumer and producer prices. Beijing has to redact or hide information about the real state of the economy. The country has banned reports on youth unemployment data, analysts are no longer permitted to criticize the Chinese economy on TV. During face-to-face meetings with foreign investors, officials prefer to stick to the official statements to avoid accusations from the government. Notably, the majority of analysts were not ready for a rate cut. However, the release of disappointing statistics for July shed light on the regulator's actions. Beijing indicated that domestic demand, still seen as the key to rebooting the economy after the pandemic, remains insufficient. Therefore, the financial system needs to adjust macroeconomic policies and boost confidence in the face of risk aversion. In addition to the sharp interest rate cut, the country's authorities started to require top managers of state-owned and private companies to study the ideas of Chinese President Xi Jinping more thoroughly.