In a decisive move to bolster the economy, China’s central bank cut its key short-term policy rate and lowered the amount of cash banks must keep in reserve on Friday, following a significant meeting of the Politburo on Thursday. The strong monetary stimulus package was warmly welcomed by stock markets, which rallied in response.
Ben Harburg, Managing Partner at MSA Capital, highlighted the positive impact of the central bank’s actions on overseas institutional investors. Speaking to CGTN, he noted that these investors are particularly incentivized to invest in China following the central bank’s move and the top policymakers’ extensive goals to shore up the Chinese economy.
The central bank’s rate cut and reduction in reserve requirements are expected to inject liquidity into the financial system, encourage lending, and stimulate economic activity. These measures signal the government’s commitment to supporting growth and stabilizing the economy amid global uncertainties.
Market analysts believe that the combination of monetary easing and policy support will reinforce investor confidence and attract foreign investment, further enhancing China’s economic prospects.
Reference(s):
cgtn.com
