Central Bank of China announced a major package of measures aimed at reviving the country's stalled economy, the BBC reports. People's Bank of China (PBOC) Governor Pan Gongsheng announced plans to reduce borrowing costs and allow banks to increase lending.
The move comes after a series of data showing the world's second-largest economy will miss its 5% growth target this year. Stock markets in Asia jumped after Pan's statement.
Speaking at a news conference alongside representatives of two other financial regulators, Pan noted that the central bank will reduce the amount of cash banks must hold in reserve known as reserve requirements (RRR). The RRR will initially be cut by half a percentage point, which is expected to free up about 1 trillion yuan, he explained. According to him, it is possible to make another reduction later in the year.
Additional measures aimed at boosting China's crisis-hit property market include cutting interest rates on existing mortgages and reducing minimum down payments for all types of housing to 15%. The country's real estate industry is battling a sharp decline from 2021.
The new economic stimulus measures by China's central bank come just days after the US Federal Reserve cut interest rates for the first time in more than four years.