China will introduce a series of policies to support the high-quality development of its economy, said officials from the financial regulatory departments at a press conference in Beijing on Tuesday.
The country will cut the reserve requirement ratio (RRR) by 0.5 percentage points in the near future, providing about 1 trillion yuan (about 141.78 billion U.S. dollars) in long-term liquidity to the financial market, Pan Gongsheng, governor of the People's Bank of China (PBOC), said Tuesday.
The central bank will also reduce the interest rate of seven-day reverse repurchases from 1.7 percent to 1.5 percent, said Pan.
The reduction was aimed at guiding the loan prime rate (LPR) and deposit rate to move downwards and maintaining stability in the net interest margin of commercial banks, said Pan.
According to Pan, China will lower mortgage rates on existing home loans to a level similar to those of newly issued housing loans.
The average reduction in mortgage rates for existing home loans is expected to be around 0.5 percentage points, he told the press.
"The PBOC will firmly uphold the supportive monetary policy, and enhance the strength and improve the precision of its monetary policy regulation, so as to foster a favorable monetary and financial environment for stable economic growth and high-quality development," said Pan.
Speaking at the press conference, Li Yunze, head of the National Financial Regulatory Administration, said there will be a strong push to enhance financial support for key sectors and areas of weakness.
Moreover, large commercial banks will booster their abilities to serve the real economy, said Li.
"Capital serves as the foundation for enhancing the capacity to serve the real economy and as a barrier to withstand risks. The country plans to increase the Tier 1 capital for six large commercial banks," said Li.
Tier-1 capital refers to the core capital held in a bank's reserves, including common stock and disclosed reserves.
In term of the stock market, Wu Qing, head of the China Securities Regulatory Commission (CSRC), stated that they will actively back listed companies in pursuing mergers and reorganizations focused on strategic emerging and future industries, and support those companies in upgrading to foster new quality productive forces.
At the same time, the CSRC and other departments will formulate guidelines to facilitate the entry of medium- and long-term funds into the market, said Wu.
"A range of measures will be implemented to boost the quality and investment appeal of listed companies, improve the institutional framework to facilitate investors' participation in corporate governance, and crack down on various illegal activities. The goal is to create a favorable market ecosystem where medium- and long-term funds are willing to come and stay for development," said Wu.
China to introduce multiple policies to support high-quality economic development: officials
