Doha: China's central bank announced on Wednesday its decision to reduce the rate for seven-day reverse repos by 0.1 percentage points, effective from Thursday. This adjustment sets the rate at 1.4 percent as part of efforts to implement a moderately loose monetary policy and strengthen support for the real economy.

According to Qatar News Agency, the People's Bank of China (PBOC) aims to facilitate economic growth and stability through this measure. A reverse repo involves the central bank purchasing securities from commercial banks with a commitment to sell them back in the future, thus injecting liquidity into the banking system.

In addition to the reverse repo rate adjustment, the PBOC stated that starting Thursday, the interest rates for the standing lending facility (SLF) will also be cut by 0.1 percentage points. Consequently, the new rates for overnight, seven-day, and one-month SLF will be adjusted to 2.25 percent, 2.4 percent, and 2.75 percent, respectively.

The announcement was made shortly after PBOC governor Pan Gongsheng indicated at a press conference that a suite of monetary policies, including reductions in the policy rate and reserve requirement ratio, would be introduced to enhance macroeconomic regulation. Pan highlighted that the policy rate reduction is anticipated to lead the loan prime rate (LPR), a benchmark for market-based lending rates, to decrease by 0.1 percentage points.