TPI Composites files for Chapter 11 bankruptcy, plans delisting from Nasdaq
Investing.com-- The People’s Bank of China on Wednesday said it will reduce bank reserve requirements and inject more liquidity into the economy to help weather headwinds from a bitter trade war with the United States.
The announcement comes just after U.S. and Chinese officials confirmed that the two countries will meet for trade talks in Switzerland this week.
The PBOC will cut the borrowing cost of its seven-day repurchase agreements by 10 basis points to 1.40%. The central bank will also cut its reserve requirement ratio (RRR)– the amount of cash required to be held by banks as reserves– by 50 basis points, to 6.2%. Both measures are set to release more monetary stimulus into the economy, with PBOC Governor Pan Gongsheng stating that the RRR cut will release 1 trillion yuan ($138 billion) in liquidity.
"The moves signal a clear shift towards looser monetary policy in response to the trade shock and have similarities to the PBOC response last September, when China moved to announce a broad set of support measures to address its growth slowdown,” analysts at Deutsche Bank (ETR:DBKGn) said in a note.
The rate cuts come amid some recent strength in the yuan, as it benefited from a weaker dollar and a series of mildly stronger midpoint fixes. A stronger yuan gives the PBOC more headroom to loosen policy, with the RRR cut being the PBOC’s first since September.
More monetary support from Beijing comes as China grapples with a bitter trade war against the U.S., after both countries slapped over 100% trade tariffs on each other in April.
While China’s economy improved in the first quarter of 2025, weak purchasing managers index prints for April showed the second quarter was likely to be hamstrung by the trade conflict.
(Scott Kanowsky contributed reporting.)