China has reduced its policy rate and lowered the amount of cash lenders must keep in reserve, as Beijing ramps up efforts to help an economy caught in a second trade war with the US.
The People’s Bank of China (PBOC) cut the seven-day reverse repurchase rate to 1.4 percent from 1.5 percent, PBOC Governor Pan Gongsheng (潘功勝) said at a briefing yesterday.
The central bank would also trim the reserve requirement ratio (RRR) by half a percentage point, he said.
Photo: EPA-EFE
Pan’s announcement came hours after China said it would hold its first trade talks this weekend with US officials since US President Donald Trump unleashed a 145 percent tariff on most Chinese goods.
The latest steps aim to guide borrowing costs lower and are among the 10 measures outlined by Pan, which also include rate reductions on a slew of relending tools and loans for policy banks. The RRR cut would release about 1 trillion yuan (US$139 billion) in long-term liquidity, Pan said.
The seven-day reverse repo cut would go into force today, and the RRR reduction a week later, the PBOC said in separate statements.
Pan reiterated that officials would implement a “moderately loose” monetary policy, which would translate into ample liquidity and ensure funding with relatively low financing cost.
The RRR cut could enhance the stability of bank liabilities, he said.
“The monetary package is stronger than we expected. It is a powerful signal that policymakers are committed to boosting sentiment and shoring up growth. The PBOC’s steps get the ball rolling. It’s important that the government follows up — fiscal measures are more central for stabilizing the economy, and we anticipate more measures to come,” Bloomberg Economics analysts David Qu (曲天石), Eric Zhu (朱懌) and Shu Chang (舒暢) said in a note.
China has pledged to shift to domestic demand to maintain growth, as Trump’s tariffs threaten to cripple trade with the US. Exports could well contract this year, after contributing to 40 percent of economic growth in the first quarter.
US Secretary of the Treasury Scott Bessent and US Trade Representative Jamieson Greer are to travel later this week to Switzerland for trade talks with China led by Chinese Vice Premier He Lifeng (何立峰). The plan was announced in statements on Tuesday from the Chinese and US governments.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in server chips, expects revenue to decline this year due to sagging demand for 5-nanometer artificial intelligence (AI) chips from a North America-based major customer, a company executive said yesterday. That would be the first contraction in revenue for Alchip as it has been enjoying strong revenue growth over the past few years, benefiting from cloud-service providers’ moves to reduce dependence on Nvidia Corp’s expensive AI chips by building their own AI accelerator by outsourcing chip design. The 5-nanometer chip was supposed to be a new growth engine as the lifecycle
RSS