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China cuts rates to lift virus-battered economy

China cut its key interest rate Thursday (February 20) to aid an economy battered by the coronavirus outbreak.

The loan prime rate - a new benchmark introduced last August - fell 10 basis points to 4.05%.

Analysts had widely expected the move, with all 51 polled by Reuters predicting it.

The cut is intended to lower borrowing costs for businesses struggling with a slump in trade.

But economists polled by Reuters forecast that Chinese growth will slump to 4.5% in the first quarter, from 6% in the previous three months.

Some see Q1 as low as 3%.

That leaves investors betting there's more monetary and fiscal stimulus to come.

Thursday's move was cheered by equity traders.

Shanghai's benchmark stock index closed over 1.8% higher following the news.

On currency markets, the Chinese yuan weakened to a more than two-month low.