Governor Pan Gongsheng of the People’s Bank of China (PBOC) unveiled intentions to reduce borrowing rates and let banks to expand lending.
The decision was made in response to a string of unsatisfactory data points that raised predictions in recent months that the second-biggest economy in the world will fall short of its own 5% growth objective this year.
Asia’s stock markets surged following Mr. Pan’s declaration.
At a unique press conference, Mr. Pan announced that the central bank would lower reserve requirement ratios—a measure of how much cash banks must keep on hand—alongside representatives from two other financial regulators (RRR).
Initially, the RRR will be reduced by 0.5 percentage points.
Mr. Pan went on to say that there might be one more cut made this year.
Additional steps to stimulate China’s real estate industry during the crisis include reducing the interest rates on current mortgages and bringing down the required minimum down payment to 15% for all home types.
Since 2021, the nation’s real estate market has been experiencing a severe decline.
Unfinished construction projects and a significant number of unsold homes remain after the failure of several developers.
A few days ago, the US Federal Reserve dropped interest rates for the first time in almost four years, and it did so more sharply than normal. .
