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CHINA’S central bank has announced a sweeping round of monetary easing aimed at bolstering its slowing economy, as pressure from ongoing trade tensions with the United States and global financial uncertainty continues to mount.
The People’s Bank of China (PBOC) will reduce the reserve requirement ratio (RRR) for banks by 0.5 percentage points, freeing up 1 trillion yuan (approximately US\$139 billion) in liquidity for long-term use in capital markets. The central bank also cut its key policy interest rate by 0.1 percentage points to 1.4 percent and reduced the interest rate for housing loans by 0.25 percentage points.
“These adjustments are necessary as the global economy faces growing uncertainty,” said PBOC Governor Pan Gongsheng in Beijing. “Escalating trade tensions are disrupting supply chains, adding volatility to international financial markets, and slowing down global growth.”
The measures are expected to take effect within days and are aimed at increasing bank lending, encouraging investment, and supporting domestic demand amid a challenging external environment.
Market observers had widely anticipated Beijing would roll out fresh stimulus as the economy shows signs of stress from both international trade conflicts and internal structural pressures. - May 7, 2025
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