BEIJING, May 7 (Reuters) - China's central bank governor on Wednesday flagged interest rate cuts and a liquidity injection into the banking system, among other monetary policy easing measures aimed at mitigating the impact of a trade war with the United States.
The announcement comes shortly after U.S. and Chinese officials said U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China's top economic official He Lifeng in Switzerland this weekend for talks.
China's central bank will lower the borrowing cost of its seven-day reverse repurchase agreements, its benchmark interest rate, by 10 basis points (bps) to 1.40%, effective May 8. Other interest rates will drop in line with the key rate.
The amount of cash that banks must hold as reserves, known as the reserve requirement ratio (RRR), will also be cut by 50 bps, bringing the average level to 6.2%. The People's Bank of China's Governor Pan Gongsheng told a news briefing the first RRR cut since September last year will release 1 trillion yuan ($138 billion) in liquidity.
Pan also said the central bank will enhance some structural lending tools.