China’s economic growth has decelerated in recent months as a prolonged slowdown in the property sector has weighed on consumer sentiment and curbed spending. Economists have slashed their growth forecasts to less than the government’s official target of about 5 per cent for 2024 as deflationary forces have persisted, with producer prices declining since last year.

China announced a broad range of stimulus measures on 24th Sep to support the faltering economy, stabilise the housing sector and restore market confidence

1. RRR CUT: China’s central bank will cut banks’ reserve requirement ratio (RRR) by 50 basis points in the near future, freeing up about 1 trillion yuan ($142.21 billion) for new lending.
2. RATE CUT: China’s central bank will cut the seven-day reverse repo rate by 0.2 percentage points to 1.5%
3. REDUCTION IN EXISTING MORTGAGE RATES: China’s central bank will guide commercial banks to reduce the interest rates on existing mortgages by 0.5 percentage point on average, in order to provide some relief to households.