From Bloomberg, September 23, 9:26 PM EDT:
China’s central bank unleashed a blitz of policy support for the economy, as policymakers make their broadest push so far to hit this year’s annual growth target of about 5%.
People’s Bank of China governor Pan Gongsheng announced a series of stimulus measures at a rare briefing Tuesday in Beijing, including moves to boost banks’ lending to consumers and corporates, and a cut to its key short-term interest rate. China will also lower the mortgage rate for existing housing loans.
“Monetary policy easing come bolder than expected, with both rate cuts and RRR cuts announcing at the same time,” said Becky Liu, head of China macro strategy at Standard Chartered Plc. “We see room for bolder easing ahead in the coming quarters, following the Fed’s outsized rate cuts.”
The offshore yuan weakened 0.1% as PBOC announced the cuts. China’s 10-year government bond yields declined to 2%, a fresh record low.
The reserve requirement ratio, or the amount of cash banks must keep in reserve, will be lowered by 0.5 percentage points. That will unleash 1 trillion yuan ($142 billion) in liquidity, Pan said. China may also cut the RRR further this year by another 0.25 to 0.5 percentage points at appropriate time, he added....
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