China to cut key rates by 10 points, bank reserve requirement by 50 points in bid to boost economy

China's central bank and financial regulators announced sweeping plans on Wednesday to cut key interest rates in an effort to shore up growth in the face of trade worries.

China will cut the seven-day reverse repurchase rates by 10 basis points to 1.4% from 1.5%, the People's Bank of China Governor Pan Gongsheng said at a press briefing. That will bring down the loan prime rate, the main policy rate, by around 10 basis points, the governor said.

The central bank will also lower the reserve requirement ratio, which determines the amount of cash banks must hold in reserves, by 50 basis points, unleashing additional liquidity of 1000 billion yuan ($ 138.6 billion) to the market.

Pan was speaking along with officials from the National Financial Regulatory Administration and the China Securities Regulatory Commission.

The press conference took place hours after Beijing's affirmation that Chinese Vice Premier He Lifeng will hold talks with U.S. Treasury Secretary Scott Bessent in Switzerland later this week to discuss tariff and trade matters, in the latest sign that negotiations could begin between the two sides.

Those would be the first confirmed trade talks between the two countries since U.S. President Donald Trump ratcheted up tariffs on Chinese goods to an eye-watering 145%, prompting Beijing to retaliate with additional levies of 125% on imports from the U.S.

The planned talks could mark a turning point in ongoing trade war that has rattled markets and crippled trade between the world's two largest economies.

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