PBOC Announces 0.5% RRR Cut to Inject 1 Trillion Yuan in Liquidity

China’s central bank has taken decisive action to bolster economic growth amid ongoing trade tensions. The People’s Bank of China (PBOC) will reduce the reserve requirement ratio (RRR) by 50 basis points, unleashing approximately 1 trillion yuan ($178.2 billion) into the financial system.

Governor Pan Gongsheng outlined the move as part of a broader stimulus package targeting key sectors. The liquidity injection will specifically support factory modernization, technological innovation, and elder care services—areas critical to China’s economic rebalancing.

Concurrent rate adjustments include cutting the 7-day reverse repo rate to 1.4% and reducing structural tools rates by 25 basis points. These coordinated measures suggest Beijing’s growing concern about economic headwinds from the U.S. trade dispute.