{"id":14626,"date":"2024-09-27T06:30:00","date_gmt":"2024-09-27T06:30:00","guid":{"rendered":"https:\/\/focus.cbbc.org\/?p=14626"},"modified":"2024-10-08T13:22:49","modified_gmt":"2024-10-08T13:22:49","slug":"china-unveils-new-measures-to-stimulate-the-economy","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/china-unveils-new-measures-to-stimulate-the-economy\/","title":{"rendered":"China unveils new measures to stimulate the economy"},"content":{"rendered":"\n

On 24 September 2024, China unveiled its largest stimulus in years in an effort to revive its struggling economy amid a sharp property downturn and falling consumer confidence.<\/p>\n\n\n\n

At a press conference in Beijing, People\u2019s Bank of China (PBOC) governor Pan Gongsheng introduced a series of monetary reforms designed to boost investment and consumption.<\/p>\n\n\n

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Reserve requirement ratio (RRR) reduction<\/h4>\n\n\n\n

The PBOC will reduce the RRR \u2013 the amount of money banks must keep aside and cannot lend out \u2013 by 50 basis points, which will release approximately CNY 1 trillion (\u00a3107 billion) for new lending. This reduction may be followed by a further cut of 0.25 to 0.5 percentage points later in the year, depending on market liquidity\u200b.<\/p>\n\n\n\n

Interest rate cuts<\/h4>\n\n\n\n

The seven-day reverse repo rate \u2013 the interest rate at which the PBOC lends money to commercial banks for short periods, using government bonds as collateral \u2013 will be lowered from 1.7% to 1.5%. Other key rates will also be cut to encourage borrowing\u200b.<\/p>\n\n\n\n

Mortgage and property market support<\/h4>\n\n\n\n

Average interest rates for existing mortgages will be reduced by 50 basis points. Furthermore, the minimum down payment requirement for second homes will be cut from 25% to 15%.<\/p>\n\n\n\n

A CNY 300 billion (\u00a331.9 billion) fund, introduced in May and initially 60% funded by the central bank, will now be fully funded by the central bank to encourage local governments to purchase unsold homes and convert them into subsidised housing\u200b.<\/p>\n\n\n\n