Update: China Unveils Monetary Support to Stem U.S. Tariff Impact

Measures include a cut in banks’ required reserves that will inject 1 trillion yuan into the financial system and the first reduction in the key policy interest rate since September

China’s central bank unveiled a raft of monetary easing measures on Wednesday, intensifying efforts to boost domestic demand and support the stock and property markets amid increasing concerns that the tariff war with the U.S. is starting to weigh on economic growth.

The announcement by the People’s Bank of China (PBOC) at a press briefing with two other financial regulators came shortly after confirmation by both the U.S. and China that their officials will hold talks in Switzerland later this week to try and resolve their trade dispute.

PBOC Governor Pan Gongsheng announced 10 monetary policy measures that include lowering banks’ reserve requirement ratio (RRR) for the first time since September and temporarily scrapping the ratio altogether for auto finance and financial leasing firms, cutting its key policy rate by 10 basis points to a record low, and slashing rates on housing provident fund (HPF) loans and the pledged supplementary lending program by 25 basis points.

To bolster support for capital markets, the central bank has combined the quotas of two programs — an existing 500 billion yuan ($69.2 billion) swap facility for qualified institutional investors and a 300 billion yuan relending facility for qualified listed companies and their major shareholders. Meanwhile,