Guangzhou (JLC), May 7, 2025--China's central bank on Wednesday announced a package of measures to further implement the moderately loose monetary policy and promote the high-quality development of the economy, including a cut in the reserve requirement ratio (RRR) and policy rate.
The People's Bank of China decided to reduce the RRR for financial institutions by 0.5 percentage points from May 15 (excluding financial institutions that have already implemented a 5% RRR), providing about 1 trillion yuan (138.9 billion US dollars) in long-term liquidity.
The RRR for auto finance companies and financial leasing companies will be cut by 5 percentage points.
The policy rate will be cut by 0.1 percentage points, i.e., the open market 7-day reverse repo rate will be lowered from the current 1.5% to 1.4%, from May 8. It is expected that this will drive the loan prime rate down by around 0.1 percentage points in tandem.
