MNI BRIEF: PBOC Cuts Targeted Tools Interest Rate By 25bp

The People’s Bank of China will cut the interest rate of its targeted tools to boost support for key sectors, PBOC Governor Pan Gongsheng told a press conference on Wednesday.

The Bank will reduce rates of its relending facilities by 25 basis points to 1.5% from 1.75% and ease the interest rate of pledged supplementary lending, a relending tool for policy banks, by 25bp to 2%, Pan said. 

The reduction is expected to save CNY15 billion to CNY20 billion in lenders' funding costs, he noted. 

The PBOC maintains 10 targeted tools that it uses to direct funding to key sectors and address structural issues within the economy, with an outstanding amount of CNY5.9 trillion as of the end of the first quarter in 2025. (See MNI: Low Credit Demand Feeds PBOC Easing Caution; Tariffs Key)