China’s central bank lowered its key medium-term lending rates on Thursday, in a much anticipated move as the economy’s post-Covid recovery continues to lose momentum.

The People’s Bank of China (PBOC) lowered the rate on 237 billion Chinese yuan ($33 billion) of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points — from 2.75% to 2.65%.

The MLF is a tool that the PBOC uses to manage liquidity in the banking system and guide the borrowing costs of commercial banks. The lower rate means that banks can borrow money from the central bank at a cheaper cost, which could encourage them to lend more to businesses and consumers.

The central bank last lowered the rate on 400 billion yuan of one-year MLF loans in August, making Thursday’s move the first such cut in 10 months.

The rate cut comes as China’s economy faces increasing headwinds from a resurgence of Covid-19 cases, supply chain disruptions, power shortages, and regulatory crackdowns on various sectors. The country’s gross domestic product (GDP) grew by 7.9% year-on-year in the second quarter, down from a record 18.3% in the first quarter.

Bank of England hikes interest rates by 25 basis points to 4.25%