China cuts rates on structural monetary policy tools by 0.25 pp

The one-year relending rate will be reduced from 1.5 per cent to 1.25 per cent, with rates for other maturities adjusted accordingly, PBOC deputy governor Zou Lan told a press conference.

Zou said the quota of key structural monetary instruments will be expanded. This includes a central bank lending quota worth 1 trillion yuan ($143.4 billion) to support small and medium private companies, and a 400 billion yuan increase in the central bank lending quota for technological innovation and upgrades, bringing the total to 1.2 trillion yuan, according to a state-controlled media outlet.

There is scope this year for benchmark interest rate cuts and reductions in the reserve requirement ratio (RRR), which now stands at 6.3 per cent on an average.

Zou vowed to raise liquidity injections and flexibly conduct open market operations of buying and selling government bonds to create a supportive monetary and financial environment for the smooth issuance of government debt.

The minimum down payment ratio for loans to purchase commercial properties will be lowered to 30 per cent to help reduce inventory in the commercial real estate market, he added.

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