China’s Central Bank Unveils Major Economic Stimulus Plan.

China’s central bank, the People’s Bank of China (PBOC), has announced a significant set of measures to boost the country’s slowing economy. Governor Pan Gongsheng revealed plans to lower borrowing costs and increase bank lending to address concerns that China may miss its 5% growth target this year. Following the announcement, Asian stock markets saw a positive response.

Among the key initiatives, the PBOC will reduce the reserve requirement ratio (RRR) for banks by half a percentage point, which is expected to release around 1 trillion yuan ($142bn; £106bn) into the economy. Pan also hinted at the possibility of further cuts later in the year.

In a bid to stabilize the struggling real estate sector, the central bank will lower interest rates on existing mortgages and reduce minimum down payments on all types of homes to 15%. China’s property market has been in a sharp decline since 2021, leading to developer collapses and numerous unfinished projects.

The PBOC’s announcement follows a recent move by the US Federal Reserve to lower interest rates for the first time in over four years. Additionally, measures were introduced to support China’s stock market, with stock indexes in Shanghai and Hong Kong rising by more than 4% in response to the news.