People’s Bank of China Governor Pan Gongsheng said during a press conference on Tuesday that China will cut the amount of the reserve requirement ratio (RRR) by 50 basis points (bps). 

Gongsheng added that the Chinese central bank would cut the 7-day repo rate to 1.5% from 1.7% and down payments for second homes will be cut to 15% from 25%.  

Key quotes

Must coordinate monetary and fiscal policies.

Must support the steady recovery of prices in the economy.

By year-end, we might cut the RRR rate further. 

After the RRR cut, the financial weighted ratio for large banks will be reduced to 8%. 

MLF will be lowered by 0.3%.

LPR will be lowered by 0.2 to 0.25%.