China Cuts Rates by 10 Basis Points and RRR by 50 Basis Points, Injecting 1 Trillion Yuan Ahead of US Trade Talks in Geneva

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Updated May 7, 2025, 02:12 PM

China has announced a series of monetary policy easing measures aimed at bolstering its economy amidst ongoing trade tensions with the United States. The People's Bank of China (PBOC) has cut its 7-day reverse repo rate by 10 basis points to 1.4% from 1.5%, and lowered the reserve requirement ratio by 50 basis points to 9.0%, effective from May 8 and May 15 respectively. These actions are expected to inject approximately 1 trillion yuan ($138.6 billion) into the market. The PBOC also introduced a 500-billion-yuan relending tool to support consumption and elderly care, and plans to expand an existing 300-billion-yuan tech relending fund. Additionally, mortgage rates for first-time homebuyers under the housing provident fund will be reduced by 25 basis points to 2.6% from 2.85%. The central bank will also gradually lower the reserve requirement for auto financing firms to zero from 5%. Further support will be provided to the technology and real estate sectors through reduced rates on 5-year loans. These measures come ahead of trade talks between China and the U.S., scheduled for later this week in Geneva, Switzerland. The discussions will involve Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer. This marks the first confirmed talks since President Donald Trump escalated tariffs on Chinese goods to 145%, prompting Beijing to retaliate with tariffs of up to 125% on U.S. goods.

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#China #United States #PBOC #Geneva #Switzerland #Chinese #He Lifeng #Scott Bessent #Jamieson Greer #Donald Trump #Beijing

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Sources

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Transport Topics

@TransportTopics

China also announced a barrage of measures meant to counter the blow to its economy from the trade war. https://t.co/HlrQ0kK9Xs

Kathy Lien

@kathylienfx

Today's 5 Top Stories: 1️⃣ Fed Interest Rate Decision - no change expected 2️⃣ US-China set for trade talks this weekend 3️⃣ China cut rates & reserve requirement 4️⃣ Very strong GE factory orders 5️⃣ JPY, TWD drop Taiwan denies currency talks with US

Mohamed A. El-Erian

@elerianm

The Chinese monetary authorities announced a new round of stimulus measures ahead of this weekend’s tariff talks with the US. Here’s what they make of them (free access): https://t.co/mziKItjAN2 #economy #markets #china #tariffs #trade