China’s central bank announced on Wednesday it will reduce the borrowing cost of its seven-day reverse repurchase agreements, stepping up monetary easing measures to support the economy amid rising trade tensions with the United States.
The People’s Bank of China (PBOC) said it will lower the rate by 10 basis points to 1.40% from 1.50%, effective Thursday. The move, disclosed in an online statement, marks the first cut to the rate since September 2024, when it was reduced by 20 basis points.
The seven-day reverse repo rate now serves as the primary policy tool for guiding short-term interest rates in the broader economy. A cut to this rate may prompt downward adjustments in other market rates and liquidity instruments.
The easing measure comes as Beijing faces increasing external pressure and seeks to maintain financial stability and growth momentum.
