China to cut rates, injects liquidity amid trade war and economic slowdown

China’s central bank announced key monetary easing measures on Wednesday to support its slowing economy amid mounting trade tensions with the United States, The Guardian reported.

The People’s Bank of China will cut the banks’ reserve requirement ratio by 0.5 percentage points, injecting around 1 trillion yuan (£103.6bn) into the financial system. Additionally, a key interest rate will be lowered by 0.1 percentage point.

Governor Pan Gongsheng described the moves as “moderately loose” and aimed at countering global uncertainty and rising economic fragmentation. According to observers, China is grappling with U.S. tariffs of up to 145% on exports, which still contribute 15% to its GDP.

Efforts to stabilize the economy include lowering borrowing costs in the struggling real estate sector. The rate on a government-backed home purchase scheme will be reduced to 2.6%. Meanwhile, high-level talks between Chinese and U.S. officials are expected soon, though hopes for a trade resolution remain limited.