The Chinese mainland's central bank, the People's Bank of China (PBOC), has taken decisive steps to foster economic stability and high-quality development. Effective Friday, the PBOC reduced the reserve requirement ratio for financial institutions by 0.5 percentage points, excluding those already at a 5% ratio. This move lowers the weighted average reserve requirement to approximately 6.6%.
In addition to adjusting reserve ratios, the PBOC decreased the interest rates for its seven-day reverse repo operations from 1.70% to 1.50%, as part of a broader strategy to implement counter-cyclical monetary policy. Rates for longer-term reverse repo and liquidity operations will continue to be influenced by the adjusted seven-day rate.
These measures are part of the PBOC's commitment to maintaining a supportive monetary policy stance, aiming to create a robust monetary and financial environment conducive to stable economic growth. This comes shortly after the PBOC announced additional policies to stimulate the economy, including support for the property sector and capital markets.
Reference(s):
PBOC cuts reserve requirement and repo rates for economic growth
cgtn.com
