China to cut key rates by 10 points, bank reserve requirement by 50 points in bid to boost economy
- China announced rate cuts and reduced bank reserve requirements on Wednesday to support its economy amid the U.S. trade war.
- These measures respond to the economic pressure from President Trump's tariffs of up to 145% and ongoing tariff retaliation by China up to 125%.
- The central bank lowered the reverse repo rate from 1.5% to 1.4%, cut the lending rate by 0.25 percentage points to 1.5%, and reduced the reserve ratio by 0.5%.
- People's Bank of China Governor Pan Gongsheng announced that lowering the reserve requirement ratio by 0.5% will free up approximately 1 trillion yuan in additional funds to encourage more lending.
- Despite these moves, economic challenges persist due to weak consumer demand and unresolved trade tensions, with experts noting rate cuts alone may not resolve the downturn.
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68 Articles
Channel News Asia
ZawyaChina's central bank to spur financing support for consumption, trade
BEIJING: China's central bank said on Friday (May 9) it will spur financial institutions to expand support for consumption and foreign trade amid a protracted trade war with the United States. Beijing stepped up efforts this week to cushion the economic damage caused by the tariff conflict with Washington,
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China’s central bank has called for coordinated efforts within the government to lift consumer prices, sending an unusually strong message on the need to tackle a problem that has plagued the world’s second-largest economy for years.
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Among the most headline-grabbing moves is a 0.5 percentage point cut in the reserve requirement ratio, expected to unleash some CNY1 trillion ($138bn) into the financial system. But that’s just the beginning.
The Chinese and US administrations have confirmed that they will talk about tariffs later this week, and China, in an effort to help its slowing economic growth, has already cut interest rates and reduced the reserve requirement ratio. Such decisions by China are aimed at reducing loan interest rates and increasing liquidity. This morning, the value of the Hong Kong HANG SENG index is increasing by about 0.80 percent. Today, the FED will announc…
They will also reduce several important interest rates, to offset the effects of the tariff war.
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