China announced today a reduction of one of the key interest rates by 0.1 percentage points, as well as a shortening of mandatory reserves for banks by 0.5 percentage points. These steps are intended to stimulate the economy, which has suffered from a slowdown in consumption and trading pressures.
Pan Gongsheng, head of the People's Bank of China, stated today at a press conference that the rate for reverse repos over seven days will be lowered from 1.5% to 1.4%. He explained that these decisions are aimed primarily at supporting technological innovations and stimulating consumer demand.
It was also announced that China will lower interest rates on mortgage loans for first-time homebuyers. The interest rate on mortgage loans for the purchase of housing for those taking loans for a term of more than five years will be reduced from 2.85% to 2.6%.
