China’s Central Bank May Cut Interest Rates to 1.5% in 2025
China’s central bank is considering a potential interest rate cut in 2025 to stimulate the economy, according to recent reports.
Beijing, China, Interest Rates, Economy, Xi Jinping
Beijing: So, it looks like China’s central bank is thinking about cutting interest rates from the current 1.5% sometime in 2025. This info comes from the Financial Times, which got the scoop from the bank itself.
The People’s Bank of China is shifting its focus. They want to adjust interest rates more and move away from just hitting loan growth targets. It’s part of a bigger plan to reform how they handle interest rates, which some experts say is going to be a tough job.
Right now, the main rate they’re looking at is the seven-day reverse repo rate. They just dropped it from 1.7% to 1.5% not too long ago, back in September.
During a big meeting in December, China’s leaders promised to cut interest rates when the time is right. They also want to ease up on how much cash banks need to keep on hand. This is all part of a plan to boost lending and investment since the economy isn’t doing so hot.
Top officials also talked about increasing the budget deficit and loosening monetary policy. This comes as China braces for more trade issues with the U.S., especially with Donald Trump back in the picture.
Last year, China’s economy was pretty reliant on manufacturing and exports, but household spending was a letdown. The property market crisis has really hit consumer wealth hard, and a lot of government help has gone to producers and infrastructure instead.
Advisors are suggesting that Beijing keep its growth target steady this year but push for stronger fiscal measures to help boost domestic demand.
President Xi Jinping mentioned that China’s GDP for 2024 is expected to top 130 trillion yuan, which is about $17.81 trillion. He also said they’ll be rolling out more proactive policies to encourage growth through 2025.