China to cut banks’ reserve requirements by 50 basis points from Feb. 5

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Pan Gongsheng was named party secretary of the People's Bank of China on July 1, 2023.

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BEIJING â China pledged to reduce the amount of liquidity that its banks are required to hold as reserves early next month in its bid to boost its struggling economy.

The Chinese central bank said its expects rapid credit growth in the first quarter. Reserve ratio requirements for banks will be cut by 50 basis points from Feb. 5, which will provide 1 trillion yuan in long-term capital, Pan Gongsheng, the People's Bank of China governor, said at a press conference in Beijing Wednesday.

This comes after China vowed Monday to "strengthen the market's inherent stability" amid a rout in the country's onshore and offshore stock markets.

The Chinese economy is fraught with financial risks, with some of its largest real estate developers facing serious debt problems as BeijingÂ strives to deleverage its once-bloated real estate sector.

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