CHINA’S central bank, the People’s Bank of China (PBOC), announced a series of measures yesterday aimed at lowering the rate of seven-day reverse repos and reserve requirement ratio, reducing mortgage rates for existing home loans and supporting the stable development of the stock market.

The central bank will reduce the interest rate of seven-day reverse repos from 1.7% to 1.5%, said Pan Gongsheng, governor of the PBOC, at a press conference.

The reduction was aimed at guiding the loan prime rate and deposit rates to move downward and maintaining stability in the net interest margin of commercial banks, Pan said.

China will also cut the reserve requirement ratio by 0.5 percentage points in the near future, providing about 1 trillion yuan (US$141.78 billion) in long-term liquidity to the financial market, Pan said.

China will also lower mortgage rates on existing home loans to a level similar to those of newly issued housing loans, Pan said. The average reduction in mortgage rates for existing home loans is expected to be around 0.5 percentage points, he said.

The minimum down payment ratio for both first and second homes will be unified, with the nationwide minimum down payment ratio for second homes to be reduced from 25% to 15%.

Pan also announced the central bank will create new monetary policy tools to support the stable development of the stock market. The central bank will establish a swap program for securities, funds and insurance companies to obtain liquidity from the central bank through asset collateralization, Pan said. The program will significantly enhance the companies’ ability to acquire funds and increase their stock holdings, Pan said.(Xinhua)