• China’s central bank cuts reserve requirement ratios by 0.5%
• Measures include lower mortgage rates, minimum down payments
• Asian stock markets rise sharply after the announcement

China’s central bank, the People’s Bank of China (PBOC), has introduced a significant set of measures aimed at boosting its slowing economy. PBOC Governor Pan Gongsheng announced plans to lower borrowing costs and increase banks’ lending capacity, following months of underwhelming economic data that suggest China may miss its 5% growth target for the year.

Asian stock markets surged after the announcement. At a rare press conference alongside two other financial regulators, Mr. Pan revealed that the central bank will cut the reserve requirement ratios (RRR)—the amount of cash banks must hold in reserve—by 0.5 percentage points. This move is expected to release around 1 trillion yuan ($142bn; £106bn) into the economy, with the possibility of further cuts later this year.

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Additionally, the PBOC aims to boost the struggling property market by reducing interest rates for existing mortgages and lowering minimum down payments for all types of homes to 15%. China’s real estate industry has faced a severe downturn since 2021, with several developers collapsing and leaving unsold homes and unfinished projects.

These new economic measures follow closely behind the US Federal Reserve’s decision to lower interest rates for the first time in over four years, leading to a significant rise in stock prices in Shanghai and Hong Kong, where major indexes closed over 4% higher.

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