Miners jump on China's new growth measures
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More news: Singapore iron ore futures jumped 4.29% to $93.3 by 3:19pm AEST, following China’s slate of growth policy measures along with a cut to its mortgage rate for existing housing loans.
Miners BHP (3.64%), Rio Tinto (3.97%) and Fortescue (1.92%) all gained.
China unveils fresh policy support to hit annual growth goal
The news: China’s central bank has released a slate of policy measures in its broadest push so far to hit this year’s annual growth target of around 5%, Bloomberg reported.
The numbers: The reserve requirement ratio (RRR), or the amount of cash banks must keep in reserve, will be lowered by 0.5 percentage points. People’s Bank of China governor Pan Gongsheng said the move will unleash 1 trillion yuan ($142 billion) in liquidity.
China may also cut the RRR further this year by another 0.25 to 0.5 percentage points at the appropriate time, Pan said.
The seven-day reverse repurchase rate will be lowered from 1.7% to 1.5%.
The context: Pan announced the new stimulus measures at a rare briefing in Beijing. They also included moves to boost banks’ lending to consumers and corporates, and a cut to its key short-term interest rate. China will also lower the mortgage rate for existing housing loans.
China's government has so far failed to prevent a slowdown in the world’s second largest economy, with growth weakening further after slowing to its worst pace in five quarters. The country remains at risk of missing its annual GDP target for the second time in three years.
The source: Bloomberg
