The Annual Conference of Financial Street Forum 2024 kicks off in Beijing on October 18. (Photo: Courtesy of Organizing Committee of Financial Street Forum)
The People’s Bank of China (PBC) may further reduce the reserve requirement ratio (RRR) by 0.25-0.5 percentage points by the end of the year, depending on the liquidity situation, Pan Gongsheng, governor of the central bank, said in a speech delivered to the Annual Conference of Financial Street Forum 2024 in Beijing on Friday.
In addition, the central bank may cut the seven-day reverse repo rate by 0.2 percentage points and lower the medium-term lending facility by 0.3 percentage points, Pan said.
On September 27, the PBC announced a cut in the RRR by 0.5 percentage points for financial institutions.
Pan said the central bank and other Chinese financial authorities have announced a raft of policies to support steady economic growth, and have also convened a meeting with financial institutions, asking them to accelerate implementation of relevant policies.
Those policies have drawn many positive comments since their announcement, and have greatly elevated social confidence and produced a sound effect on stable economic and financial operations, Pan said.
In the first three quarters of 2024, China’s GDP grew by 4.8 percent year-on-year, reaching 94.97 trillion yuan ($13.33 trillion), according to data released by the National Bureau of Statistics on Friday. This growth indicates that the world’s second-largest economy continues to show positive and resilient growth momentum amid various internal and external challenges.
Currently, the Chinese economy is stable and making good progress. The transformation from old growth drivers to new ones continues while high-quality development is making steady progress. The favorable conditions of a huge market, strong resilience, great potential, and strong vitality remain unchanged, Li Yunze, head of the National Financial Regulatory Administration (NFRA), said at the same conference on Friday.
Li said efforts will be made to encourage financial institutions to expand financial supply, optimize resource allocation, and accelerate the smooth circulation of capital in an all-out effort to boost economic recovery and growth.
Li said the financial authorities will step up support for key fields and weak links so as to optimize financial supply for expanding effective demand.
By sticking to the country’s “two unswervingly” stance on equal support for public and non-public sectors, the financial authorities will equally strengthen support for private enterprises and small and micro enterprises, according to Li.
Li stressed that the financial authorities will coordinate development and security in a bid to build a sound financial environment. The NFRA will support large banks to replenish core tier-1 capitals so as to expand credit growth room, the official said.