BEIJING – China announced plans for a rare briefing on the economy by three top financial regulators just as it cut one of its short-term policy rates, fuelling speculation the authorities are preparing to ramp up efforts to revive growth.
The authorities announced on Sept 23 that central bank governor Pan Gongsheng will hold a press conference on Sept 24 on financial support for economic development, alongside two other officials.
Minutes later, the People’s Bank of China (PBOC) lowered the 14-day reverse repurchase rate to 1.85 per cent from 1.95 per cent, as part of reductions initiated in July.
Taken together, the moves bolster expectations for the PBOC to lower rates, after the US Federal Reserve finally started cutting last week.
China’s central bank also recently signalled it was preparing additional policies.
A slew of disappointing data in August raised concerns that China could miss its annual growth target of around 5 per cent without more support.
The yield on China’s 10-year government bonds fell one basis point to a fresh low of 2.03 per cent, a sign traders are pricing in more monetary stimulus.
In the foreign exchange market, the PBOC raised its daily reference rate for the renminbi to 7.0531 per US dollar, putting the key 7 level in sight.
While the Sept 23 reduction reflected a catch-up with a 10 basis point July cut in the seven-day reverse repurchase rate, easing measures were likely imminent, said Pinpoint Asset Management president and chief economist Zhang Zhiwei.
“I do expect PBOC will cut the seven-day reverse repurchase rate as well as the reserve requirement ratio in the coming months,” he said.
The PBOC lowered the rate on its one-year policy loans, or the medium-term lending facility, by the most since April 2020 in late July, days after it
