In a surprise move, China's central bank announced a significant cut to bank reserves on Wednesday, injecting around $140 billion into the banking system.
The People's Bank of China (PBOC) declared a 50-basis point cut, the largest in two years, effective from February 5th, aiming to support a fragile economy and counter-plunging stock markets.
This announcement, made as stock markets were closing, prompted a positive response with benchmark stock indexes and the yuan bouncing back.
PBOC Governor Pan Gongsheng indicated that the bank would unveil policies to enhance commercial property loans, providing hope for investors concerned about China's real estate sector.
The move follows China's struggle for a robust post-COVID recovery amidst a housing crisis, local government debt risks, and weakened global demand.
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