China to cut reserve requirement ratio and lower interest rates

China will cut the reserve requirement ratio by 0.5 percentage points on Feb 5 to provide liquidity to the market by about 1 trillion yuan ($140 billion), Pan Gongsheng, governor of the People's Bank of China, the country’s central bank, announced Wednesday at a news conference in Beijing.

The PBOC will also lower the interest rate of rediscount for loans to the agricultural sector and small enterprises to 1.75 percent, from Thursday, down from 2 percent, Pan said, adding those measures will jointly promote the downward trend of loan prime rate (LPR), a market-based benchmark lending rate.

liuzhihua@chinadaily.com.cn