China's Central Bank Announces Monetary Easing Measures

China's central bank, the People's Bank of China (PBOC), has announced a series of monetary easing measures, including cutting the one-year loan prime rate to 3.1% and the five-year rate to 3.6%, in an effort to support its slowing economy. Governor Pan Gongsheng indicated further reductions in the reserve requirement ratio (RRR) by 25 to 50 basis points by the end of the year, contingent on liquidity conditions. These measures follow a previous 50 basis point RRR cut and are part of a broader strategy to bolster economic growth amid a property crisis and weak consumer sentiment. Despite these challenges, China's GDP grew by 4.8% in the first three quarters of 2024, showing resilience but falling short of the government's target. The PBOC also plans to reduce the seven-day reverse repo rate by 20 basis points and the medium-term lending facility rate by 30 basis points. These initiatives are intended to enhance financial support for key sectors and promote stable economic operations.