China increases stimulus to bolster market confidence

China’s Central Bank Announces Easing Measures to Boost Economy and Stock Markets

Expectations for increased support from China to strengthen its economy and stock markets are on the rise following the recent easing announcements by the central bank. The People’s Bank of China (PBOC) will allow banks to hold smaller cash reserves, releasing 1 trillion yuan ($139.8 billion) in long-term capital. This move is seen as a shift in policy from reactive measures to proactive support for the economy. Despite being cautious about massive stimulus that could widen the yield gap between China and the US, the PBOC has taken steps to address the ongoing economic dip and the underperformance of the equity market.