Stimulus hopes rise in China as PBOC cuts rate, plans briefing

Moves bolster expectations for central bank to lower rates, following Fed

China announced plans for a rare briefing on the economy by three top financial regulators just as it cut one of its short-term policy rates, fuelling speculation that the authorities are preparing to ramp up efforts to revive growth.

The authorities announced on Sept 23 that central bank governor Pan Gongsheng will hold a press conference on Sept 24 on financial support for economic development, alongside two other officials.

Minutes later, the People's Bank of China (PBOC) lowered the 14day reverse repurchase rate to 1.85 per cent from 1.95 per cent, as part of reductions initiated in July.

Taken together, the moves bolster expectations for the PBOC to lower rates, after the US Federal Reserve finally started cutting rates last week.

The yield on China's 10-year government bonds fell one basis point to a fresh low of 2.03 per cent, a sign traders are pricing in more monetary stimulus.

In the foreign exchange market, the PBOC raised its daily reference rate for the renminbi to 7.0531 per US dollar, putting the key seven level in sight.