Pan Gongsheng was appointed Party Secretary of the People's Bank of China on July 1, 2023.
VCG | China Optical Group | Getty Images
BEIJING – China has pledged to reduce the amount of liquidity its banks must hold in reserves early next month as it tries to boost its faltering economy.
Reserve ratio requirements for banks will be reduced by 50 basis points starting February 5, which will free up 1 trillion yuan ($139.8 billion) of long-term capital, Pan Gongsheng, governor of the People's Bank of China, said at a news conference in Beijing. Wednesday.
This is the first reduction in reserve requirements this year, after two reductions last year. The People's Bank of China also said on Wednesday that there was room for further easing in monetary policy. Reducing the reserve requirements that banks must hold would increase the ability of lenders to make loans and stimulate spending in the broader economy.
Data released last week showed that the world's second-largest economy grew by 5.2% in 2023, largely in line with official expectations. The GDP reading for the fourth quarter was 5.2%, but it fell slightly below the average estimate of economists.
Its post-Covid-19 recovery has been lackluster, with China's top leaders warning that the recovery will be “zigzag.”
Beijing is seeking to boost growth in a targeted manner, while working to reduce debt in its once-bloated real estate sector, with some of the largest real estate developers facing serious debt problems. This has intensified financial risks and undermined consumer confidence.
China pledged on Monday toPromoting inherent stability in the market“Amid turmoil in the country’s internal and external stock markets.
This is a developing story. Please check back for more updates.
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