PBoC Cuts RRR, Lowers 7-day Reverse Repo

2025-05-07 01:43 By Farida Husna 1 min. read

People’s Bank of China announced on May 7th 2025 that it will cut the reserve requirement ratio (RRR) by 50 basis points, potentially injecting around CNY 1 trillion in liquidity.

The move, the first RRR cut of 2025, comes as Beijing seeks to bolster economic growth amid escalating trade tensions with the US.

The reduction will come into effect a week later.

Meanwhile, the central bank also decided to lower the rate on seven-day reverse repurchase agreements by 10 basis points to 1.40%, effective Thursday, May 8.

This is the first cut to the key policy rate since September 2024 and could prompt broader declines in market and liquidity tool rates.

The PBoC said it will also introduce a CNY 500 billion re-lending facility to support consumption and elderly care, boost its technology re-lending fund by CNY 300 billion, and plans to expand its re-lending programs for agriculture, and small and medium-sized enterprises.



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