China Cuts Policy Rate and Bank Reserves to Boost Economy

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The People’s Bank of China in Beijing. Photo: VCG

China’s central bank has cut its main policy rate and financial institutions’ reserve requirement ratio (RRR) to step up support for an economy hamstrung by a prolonged property sector slump and sluggish consumer confidence.

The People’s Bank of China (PBOC) reduced the seven-day reverse repo rate from 1.7% to 1.5% Friday, according to a statement by the monetary authority.

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China's central bank cut its main policy rate from 1.7% to 1.5% and reduced the reserve requirement ratio (RRR) by 0.5 percentage points.
The RRR cut injected around 1 trillion yuan ($142.6 billion) in long-term liquidity.
These measures aim to support an economy impacted by a prolonged property slump and weak consumer confidence, with investors eyeing potential additional fiscal initiatives.

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What Happened When

Tuesday, September 24, 2024：: The PBOC and two other financial watchdogs announced a series of stimulus measures including cuts to the policy rate and the RRR.

Friday, September 27, 2024：: The People's Bank of China (PBOC) reduced the seven-day reverse repo rate from 1.7% to 1.5% and lowered the RRR by 0.5 percentage points, injecting around 1 trillion yuan ($142.6 billion) in long-term liquidity into the financial market.

AI generated, for reference only