China reduced the amount that banks must hold in reserve on Friday ( Sep 27 ), in a bid to spur its sluggish economy by releasing an estimated US$$ 142.6 billion in liquidity into the financial market.
The shift, announced by China’s northern bank, comes a time after leading officers including President Xi Jinping met and admitted to “new difficulties” in the nation’s second-largest business.
Beijing has this week unveiled a number of measures to improve its troubled economy, which it has set to grow 5 % this year. According to objective analysts, this is positive given the numerous headwinds it faces.
On Thursday, the ruling Communist Party convened a gathering of its major figure, the Politburo, to “analyse and analyze the current economic situation”.
Beijing also reduced the central bank’s seven-day change mortgage rate, which is short-term interest on loans from business lenders.
The central bank announced a cut in the key rate, which was 1.7 % instead of 1.5 %.
Development in China is being hampered by a protracted property sector debt crisis, weak domestic consumption, and large youth unemployment.
Following Thursday’s Politburo meeting, the Xinhua news agency reported that” some new situations and issues have arisen in the current running of the economy.”
” We must view the current economic situation comprehensively, objectively and calmly, face difficulties squarely, ( and ) strengthen confidence”, it added.
Politburo members likewise concurred that it was necessary to “further increase the focus and effectiveness of legislation steps” intended to boost the business.