Just a week after the Federal Reserve cut its interest rates, another big central bank has decided to follow suit: China.

This issuing bank announced a cut in interest rates and other measures to improve the liquidity of the economy, specifically in the mortgage and financial markets.

The first measure is a reduction of 20 basis points in the intervention rate, which leaves this policy mechanism at a level of 1.5%.

This means a downward push in the general levels of interest rates in the Chinese financial market, which will make there better conditions for citizens of this country to renegotiate their debts with a lower rate.

Other measures affect the reserve levels required by commercial banks. According to the Central Bank, this indicator was reduced by 50 basis points, which will free up at least US$140 billion for new loans. Bank reserves are a key metric because they determine the amount of free money that banks have to make more loans.

Another decline in this reserve indicator is not ruled out in the near future; the central objective is to give the economy more impetus.

Finally, another of the highlighted measures is the reduction in the minimum down payment requirement for the acquisition of a second home, which dropped from 25% to 15%. This will allow citizens to acquire homes with a smaller amount of money as an initial investment.

The general position of Central Banks in the world has changed to reduce the financial tensions of households and companies and facilitate the possibilities of borrowing, as a measure to boost growth.

With this general reduction of rates in the world, we are about to enter again into an era of cheap money that is the basis of economic recovery.

In Latin America, the majority of Central Banks are also reducing their interest rates. In fact, many of them have started before the developed countries began this journey.

In response to China's announcement, the world's stock markets reacted upwards, as the message is clear to everyone: the central banks are going to give their economies a boost.

Given this situation, if all goes well, we can expect years of prosperity and economic growth to come in most countries around the world.