China to cut policy rate by 0.1 percentage points from Thursday

China's central bank announced on Wednesday to cut the rate for the seven-day reverse repos by 0.1 percentage points, starting Thursday.

After the adjustment, the rate will be set at 1.4 percent, according to the People's Bank of China (PBOC), the central bank.

The move aims to better implement the moderately loose monetary policy and enhance support for the real economy, the PBOC said in a statement.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

Starting Thursday, the interest rates for the standing lending facility (SLF) will also be reduced by 0.1 percentage points, the PBOC said.

The overnight, seven-day and one-month SLF rates will be lowered to 2.25 percent, 2.4 percent and 2.75 percent, according to the central bank.

The PBOC announcement came following PBOC governor Pan Gongsheng told a press conference that the central bank will roll out a package of monetary policies to enhance macro regulation, including lowering the policy rate and reserve requirement ratio.

Pan said the policy rate reduction is expected to lead the loan prime rate (LPR), a market-based benchmark lending rate, down by 0.1 percentage points.