PBOC lowers 7day reverse repo to 1.9 vs. 2.0 prev.
PBOC cuts 7day reverse repo rate by 10bp
PBOC39;s decision shows worries about health of economy analysts
MLF rate and LPR could be lowered by same margin analysts

SHANGHAISINGAPORE, June 13 Reuters China39;s central bank lowered a shortterm lending rate for the first time in 10 months on Tuesday, in a bid to restore market confidence and prop up a stalling postpandemic recovery in the world39;s secondlargest economy.

The cut to the lending rate signals possible easing for longerterm rates over the next week and beyond as demand and investor sentiment weaken, adding to the case for urgent policy stimulus to sustain growth.

The People39;s Bank of China PBOC cut its sevenday reverse repo rate by 10 basis points to 1.90 from 2.00 on Tuesday, when it injected 2 billion yuan 279.97 million through the shortterm bond instrument.

The central bank39;s rate cut decision was not a complete surprise to the market, said Ken Cheung, chief Asian FX strategist at Mizuho Bank.

Commercial banks have already lowered deposit rates, and PBOC governor Yi Gang also mentioned strengthening countercyclical adjustment recently.

The yuan hit a sixmonth low o 7.1680 per dollar after the rate decision while yields on China39;s benchmark 10year government bonds fell to a fresh 712month low.

Cheung said the PBOC may have wanted to mitigate the impact of any future policy easing on the Chinese yuan ahead of the Federal Reserve39;s policy…