- Bank reserve requirements (RRR) will be cut by 50 basis points from February 5, providing 1 trillion yuan of long-term capital.
- The People's Bank of China said there was scope for further monetary easing, adding that a slight recovery in consumer prices was likely.
Pan Gongsheng was appointed Party Secretary of the People's Bank of China on July 1, 2023.
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BEIJING – China has pledged to reduce early next month the amount of liquidity its banks must hold as reserves to boost its struggling economy.
China's central bank said it expects rapid credit growth in the first quarter. Bank reserve ratio requirements will be cut by 50 basis points from Feb. 5, providing 1 trillion yuan ($139.8 billion) of long-term capital, People's Bank of China Governor Pan Gongsheng said at a Press conference in Beijing Wednesday.
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This is the first reduction in reserve requirements this year, following two cuts last year. The PBOC also said on Wednesday that there was scope for further easing of monetary policy.
Data released last week showed the world's second-largest economy grew 5.2% in 2023, broadly in line with official forecasts. In the fourth quarter, GDP was also at 5.2%, but fell just short of economists' average estimates.
Beijing is trying to deliberately boost growth while deleveraging its once-bloated real estate sector, as some of its biggest real estate developers face serious debt problems. This has increased financial risks and shaken consumer confidence.
China vowed on Monday to “strengthen the market's inherent stability” amid a slide in the country's onshore and offshore stock markets.
This is a developing story. Please check back for further updates.