China announced a raft of aggressive new policies to boost the economy on Tuesday, including cutting mortgage rates on existing homes and the reserve requirement ratio, while also planning to roll out new tools to support the stock market.
The reserve requirement ratio — the amount of cash commercial banks must hold in reserves — and the mortgage rate for existing housing will be cut by half a percentage point, said People’s Bank of China Governor Pan Gongsheng.
The People’s Bank of China will support real estate companies’ land acquisition by studying measures that allow policy and commercial banks to grant loans to qualified land acquisition companies, invigorate land stock and ease financial pressures on real estate companies.
If necessary, the central bank could provide political support, Ban added.
“The current mortgage interest rate cut is expected to benefit 50 million households or 150 million people, reducing household interest expenses by about 150 billion yuan annually, which will efficiently boost consumption and investment,” Pan said at a joint press conference with Li Yunze, minister of the National Financial Regulatory Administration, and Wu Qing, chairman of the China Securities Regulatory Commission.
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