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China's PBOC Cuts RRR by 50 Basis Points, Bond Yields Fall to 2.02% and 2.14%

Sep 24, 2024, 01:16 AM

China's central bank, the People's Bank of China (PBOC), announced a series of monetary policy easing measures, including a 50 basis point cut in the reserve requirement ratio (RRR) for banks. This move is aimed at injecting liquidity into the economy, with a net injection of approximately 1 trillion yuan. The PBOC also reduced the 14-day reverse repo rate by 10 basis points to 1.85% and the 7-day reverse repo rate to 1.5%. Following these announcements, China's benchmark bond yield fell to a record low of 2.02%, and the 30-year treasury futures hit a new record high of 115.76. The yield on the 30-year Chinese government bond hit a new record low of 2.14%. Chinese stock indices responded positively, with the FTSE China A50 Index futures surging by 1% and the Hang Seng Tech Index opening up 2.4%. The Shanghai Composite Index opened up 0.79%, while the CSI 300 Real Estate Index is set to open up 2.2%. The PBOC's measures are expected to support the stable development of the stock market and boost growth in the world's second-largest economy.