PANews reported on May 7 that Pan Gongsheng, governor of the People's Bank of China, announced at a press conference held by the State Council Information Office that the reserve requirement ratio would be reduced by 0.5 percentage points and the policy interest rate would be reduced by 0.1 percentage points. Specifically: First, the deposit reserve ratio will be reduced by 0.5 percentage points, which is expected to provide about 1 trillion yuan of long-term liquidity to the market. Second, the deposit reserve system will be improved, and the deposit reserve ratio of auto finance companies and financial leasing companies will be reduced from the current 5% to 0% in stages. Third, the policy interest rate will be reduced by 0.1 percentage points, that is, the interest rate of the 7-day reverse repurchase operation in the open market will be reduced from the current 1.5% to 1.4%, which is expected to drive the loan market benchmark rate (LPR) to decline by about 0.1 percentage points. Fourth, the interest rate of structural monetary policy tools will be reduced by 0.25 percentage points, including: the interest rates of various special structural tools and the interest rates of re-loans for supporting agriculture and small businesses will be reduced from the current 1.75% to 1.5%; the interest rate of mortgage supplementary loans (PSL) will be reduced from the current 2.25% to 2%.
In addition, the central bank will lower the interest rate of individual housing provident fund loans by 0.25 percentage points, and the interest rate for the first set of houses with a term of more than 5 years will be reduced from 2.85% to 2.6%. The interest rates of other terms will be adjusted simultaneously. The re-lending quota for scientific and technological innovation and technological transformation will be increased by 300 billion yuan from the current 500 billion yuan to 800 billion yuan, and the implementation of the "two new" policies will be continuously supported. The People's Bank of China will set up 500 billion yuan of service consumption and pension re-lending to increase low-cost funding support for key consumer areas.
