Monday, September 25, 2023
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China announces additional stimulus of 1 trillion yuan to save economy

China’s State Council on Wednesday outlined a 19-point policy package, while announcing economic stimulus measures worth 1 trillion yuan ($146 billion) to boost coronavirus-affected economies, Bloomberg reported. Growth affected by the coronavirus lockdown and the housing market crisis.

Key takeaways

Stimulus measures will include “National Policy Bank Reinvestable” 300 billion yuan is used for infrastructure projects, and the ceiling of 300 billion yuan has been announced at the end of June. The local government will allocate 500 billion yuan of special bonds from the previously unused quota.”

“Vow to use ‘tools in the toolbox’ to maintain a reasonable policy scale. Be timely and decisive.”

“The economy will not be overwhelmed by excessive stimulus, and China will not overdraw future Policy space.”

“Commitment to approve a batch of infrastructure projects. Encourage local governments to use urban characteristic credit policies to support reasonable housing needs.”

“Commitment to continue Reduce financing costs and introduce measures to support the development of private enterprises and platform companies.”

Market reaction

USD/USD The yuan was last at 6.8474, down 0.16 percent on the day. The spot pulled back from a two-year high of 6.8694 reached the previous day.

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