China's People's Bank of China announces interest rate cuts

PANews reported on May 7 that the Governor of the People's Bank of China Pan Gongsheng announced at the press conference of the State Information Office that the reserve requirement ratio would be cut by 0.5 percentage points and the policy interest rate would be reduced by 0.1 percentage points. Specifically: First, reduce the deposit reserve ratio by 0.5 percentage points, and is expected to provide the market with a long-term liquidity of about 1 trillion yuan. Second, improve the deposit reserve system and reduce the deposit reserve ratio of auto finance companies and financial leasing companies from the current 5% to 0%. Third, the policy interest rate was lowered by 0.1 percentage point, that is, the open market 7-day reverse repurchase operation interest rate was reduced from the current 1.5% to 1.4%, which is expected to drive the loan market quotation rate (LPR) to decline by about 0.1 percentage point simultaneously. Fourth, the interest rate of structural monetary policy instruments was lowered by 0.25 percentage points, including: the interest rate of various special structural instruments and the interest rate of re-lending for agriculture and small businesses, both of which were reduced from the current 1.75% to 1.5%; the interest rate of mortgage supplementary loans (PSL) was reduced from the current 2.25% to 2%.

In addition, the central bank will lower the interest rate for personal housing provident fund loans by 0.25 percentage points, the interest rate for first homes over 5 years is reduced from 2.85% to 2.6%, and the interest rates for other periods will be adjusted simultaneously. The amount of re-loans for scientific and technological innovation and technological transformation will be increased from the current 500 billion yuan to 800 billion yuan, and will continue to support the implementation of the "two new" policies. The People's Bank of China will set up a 500 billion yuan re-loan for consumption and pension, and increase low-cost financial support in key areas of consumption.