China to base new lending benchmark on medium-term rates; shares rally on rate cut hopes

The People’s Bank of China (PBOC) unveiled the long-awaited reforms on Saturday to help steer borrowing costs lower and support businesses hurt by weak demand at home and a year-long trade war with the United States. While the rate overhaul has been in the works for some time, the announcement came days after data showed the economy stumbled more sharply than expected in July, raising questions over whether more rapid and forceful stimulus may be needed.