The People's Bank of China governor, Pan Gongsheng, revealed plans to reduce reserve requirement ratios (RRRs) and interest rates in 2025, aiming to boost the nation's economy.
Currently, the average RRR for Chinese financial institutions stands at 6.6%, with potential for further decreases. Pan emphasized that adjustments will align with both domestic and international economic conditions, as well as financial market performance.
In addition to lowering RRRs, the central bank plans to reduce the rates of funds provided to commercial banks through various structural monetary policy instruments. 🏦💸
To ensure ample market liquidity and lower banks' liability costs, the PBOC will utilize a mix of tools including open market operations, medium-term lending facilities, and policy rates. These measures aim to decrease the overall costs of social financing.
Looking ahead, the central bank is set to introduce new policy instruments to support investments in science and technology innovation, boost consumer spending, and stabilize foreign trade. 🌐🔬
These strategic moves are designed to foster a resilient and dynamic economic environment, encouraging growth and innovation across multiple sectors.
Reference(s):
China to cut RRRs, interest rates in 2025, says central bank governor
cgtn.com
