China has taken strong steps to support its economy, which is struggling due to a new wave of US tariffs. According to a Bloomberg report, the People’s Bank of China (PBOC) cut the seven-day reverse repo rate from 1.5 per cent to 1.4 per cent. This move lowers borrowing costs and encourages banks to lend more money.
At the same time, the PBOC will also cut the reserve requirement ratio (RRR) by 0.5 percentage points. This change means banks can hold less cash in reserve and lend more money to businesses and people. It is expected to release about 1 trillion yuan (USD 139 billion) into the economy.
More Support for Key Sectors
PBOC Governor Pan Gongsheng shared ten new measures to boost the economy. These include:
- A 500 billion yuan fund to support consumption and elderly care
- A 300 billion yuan increase in the technology re-lending fund
- More funds for agriculture and small and medium businesses
These funds will help sectors that need support the most, especially during this trade war with the US.
Trade War Pressure Grows
The new policies come after US President Donald Trump announced tariffs of up to 145 per cent on Chinese goods. Experts say this could hurt trade between the two countries in a big way.
With these new actions, China hopes to make its economy stronger and more ready to handle the pressure. As Frances Cheung from Oversea-Chinese Banking Corp said, the plan is not just about adding money but also about making the market more active and strong.
