PBOC Sees Easing Room, Steps Up Targeted Support for Economy

China’s central bank signaled it has room to further reduce interest rates and bank reserve requirements, while stepping up targeted support for the economy with a cut to the cost of its structural lending tools.

Deputy Governor Zou Lan said Thursday that the People’s Bank of China sees “some space” to reduce both the reserve requirement ratio and policy rates this year. The central bank will lower the interest rates on its structural monetary policy tools by 0.25 percentage points, reducing the one-year rate for various relending facilities to 1.25% from 1.5% effective Monday.