The Chinese government will have to act “very quickly in the weeks ahead to implement additional measures if they wish to get to the 5 per cent target”https://t.co/IjXIrC2nwj via @ft
— Oliver Stuenkel 🇧🇷 (@OliverStuenkel) September 24, 2024
China’s central bank announced a series of measures on Tuesday aimed at making it easier for households and companies to borrow money. This marks the boldest attempt by Chinese authorities since the pandemic to revive economic growth, halt a housing market crash, and stop a broad decline in prices. The People’s Bank of China cut short-term interest rates and rates on existing mortgages, reduced minimum down payments for housing purchases, and freed the country’s state-controlled commercial banks to lend a larger proportion of their assets.
China stepped up measures to shore up its beleaguered property market. The plan underscores Beijing’s urgency to stem a housing-led slowdown. https://t.co/JQZAZctETV
— Javier Blas (@JavierBlas) September 24, 2024
Pan Gongsheng, the governor of the central bank, said at a rare news conference that his agency was ready to free banks to lend even more money if needed.
Economic stimulus measures unveiled
Acting less than a week after cutting short-term rates by half a percentage point, the Chinese central bank cut its benchmark seven-day interest rate to 1.5 percent, down from 1.7 percent.
#China's central bank has unveiled a major package of measures aimed at reviving the country's flagging economy https://t.co/OrzliwVfHG
— Felipe Sahagún (@sahagunfelipe) September 24, 2024
Additionally, the People’s Bank of China told commercial banks they would be allowed to reduce, by half a percentage point, the amount of their assets held in reserve. This move is expected to free banks to lend an additional $140 billion to companies and households. The central bank also made it easier for banks to lend to companies to repurchase their shares, as well as to major shareholders to buy larger stakes in companies, both measures that typically bolster stock prices.
