China cut the amount of cash banks must keep in reserve Friday and lowered a key policy rate, as Beijing rolls out a strong stimulus package unveiled this week in a push to shore up the slowing economy and investor confidence.
The People’s Bank of China’s 0.5 percentage point reduction to the reserve requirement ratio was announced earlier this week by central bank chief Pan Gongsheng, who didn’t provide a timeframe.
The cut is aimed at creating a “good monetary and financial environment” for the steady growth of the Chinese economy, the PBOC said in a statement.
The central bank also trimmed seven-day reverse repurchase rate to 1.5% from 1.7% on Friday, authorities said in a separate statement, confirming the timing for another move already revealed by Pan.
Chinese ADRs extended gains on Friday. Alibaba rose 3%; NIO rose 13%; IQiyi rose 9%; PDD Holdings rose 5%; XPeng rose 8%.