PBOC

Plane-Try-6522

The Chinese A - shares ETF component of my portfolio has lost around 15% YTD. Without going into an entire essay: The Chinese internet companies are being weighed down by weak domestic consumption. Chinese savers, plauged by the property market, are stashing their money instead of investing in the domestic A - shares equity market. The situation is playing out similarly in the US albeit to a lesser severity: hyperscalers are punished while semis and hardware on the receiving end of the CapEx spending are being rewarded by the market. The turning point? Fiscal policies to boost Chinese domestic consumption which hasn't yet seen strong support from the Chinese government, save for a glimmer of sign for the PBOC allowing the Yuan to strengthen and attain internationalisation. One evidence that the Chinese government has allowed the gradual strengthening of the Yuan can be seen in the structural decline of the USD against the Yuan - this is something that has been taboo. If the Chinese government does step in to provide fiscal support thenthere will be a massive inflow of Chinese savings from savings accounts into the A - shares market.

Whipitreelgud

Not going to happen. The yuan exchange rate is set by the People’s Bank of China. The PBOC establishes a daily central parity rate against a basket of currencies. It doesn’t float like other currencies.

After_Olive5924

I don’t think people quite realise the massive amounts of currency that would be needed to facilitate international trade for a new would-be international reserve currency. The yuan is the only alternative and not an impossible one. The way it would work is that there would be a freely floating offshore renminbi and a controlled one at home with some exchange rate mechanism between the two that the PBOC would control. It would take off only if the dollar continuously loses its value over the coming decade while the yuan strengthens. For that to happen, the Chinese economy and exports/imports must keep growing while they prevent deflation but I believe they will hit a wall in a few years because the rest of the world will catch up on the sectors they have a lead in (Toyota won’t stay idle and accept second fiddle in the automaker race, for example, and popular Western auto brands will merge and create new brands).

Focux

Lmao, central banks like PBOC are in glee now looking at western prices. They’ve been buying for 16 months straight

ReMoGged

Institutions like the People's Bank of China (PBOC) and the Reserve Bank of India (RBI) do not care about daily electricity bills. They care about escaping the U.S. Dollar system. When retail citizens and over-leveraged Western hedge funds sell gold, driving the price down, these central banks step in and buy physical tonnage at a discount.

Different-Monk5916

you know what third party content is. I believe that they are there to sell stories, not facts. The website which you added shows 367B USD gold purchase by China PBOC in dec 2025. The actual purchases of PRC as reported in WGC reserves data is 2.7B USD roughly.

EvolvingDior

>The [People's Bank of China](https://www.bloomberg.com/news/articles/2026-02-07/china-central-bank-keeps-buying-gold-as-bull-run-hits-brakes) (PBOC) extended its gold-buying streak to 15 months in January 2026, increasing holdings by 40,000 troy ounces

Chad_Permabull_GOD

PBOC’s balance sheet is larger than the Fed’s even though the US economy is so much larger than China’s. Fed has got to turn its printers up.

lostinspacs

Chinese growth has stagnated since Covid and their debt has been exploding to compensate. Unlike the US, the only real buyer of Chinese bonds is PBOC. It’s Japan 2.0 It’s a shitty long-term situation when you factor in collapsing demographics. But right now they are in a position of relative strength, and it’s not a bad time to push all their chips in. Very interesting to see how this all unfolds.

nonofyobeesness

Spy ain’t going down anytime soon. M2 money printer has been running nonstop and China’s PBOC yuan printer going brrrrrr. We’re going to ATHs whether you like it or not.

GarrettBaldwin

Market is going higher due to quantitative support from Fed and Treasury... not to mention Bank of Japan and PBOC... That's inflationary. People can keep buying the rate cut narrative if they want... but its a smoke screen. As usual.

Boniouk84

Look into M2 liquidity, and look into PBOC & RRR cuts. We’re going up sharply next week and again in Sept/Oct when they cut RRR again. Remind me of this when both happen.

optiontrader1138

Not really, it floats within a tiny range that's authorized by the PBOC.

eldenpotato

Here’s the latest bit of proof: China’s central bank (PBOC) yesterday slashed the reverse repo rate to 1.4% and cut the reserve requirement ratio to 6.2%, which released around 1 trillion yuan (~$138 billion) in liquidity into their economy. These are not small adjustments. These are significant changes that signal the economy is under serious stress. Why now? Bc Trump’s tariffs are putting heavy strain and pressure on China’s export driven economy. It’s damaging China’s ability to export to its single most important market: the US. They pushed “dual circulation” for years to reduce their dependance on exports and boost domestic consumption but it hasn’t worked. That’s why they’re scrambling to inject liquidity and lower borrowing costs. This trade war is hitting them where it hurts. And no, I’m not defending Trump. Here’s a study on how Trump’s first term (limited) trade war affected China’s economy. Ultimately it shows Chinese exporters were unable to find sufficient alternative markets to offset the loss from decreased exports to the US. Which, as I mentioned, highlights the strategic dependance of China’s economy on the American market. https://sccei.fsi.stanford.edu/china-briefs/how-did-2018-us-china-trade-war-affect-chinas-exporters

AncientAckman

PBOC GOVERNOR PAN URGES REGIONAL UNITY AGAINST U.S. TARIFF IMPACT 

k3t4mine

PBOC'S PAN: CALLS ON ASIAN NATIONS TO WORK AGAINST US TARIFFS Trade talks going well

optiontrader1138

> Markets are forward looking, tariffs are going to be so immediately terrible that they will be rolled back, with or without Trump. In the past month, all you see here are comments like: * Empty shelves^tm * Prices will be 145% higher! * Runaway inflation * Experts agree tariffs are bad^tm * The GDP is going to collapse! Reality: 1. *If currencies are permitted to float freely, devaluations largely nullify the effect of tariffs and transfer costs to the targeted country. * Example: *No tariffs:* An Indian steel producer charges 50,000 INR for 1 ton of steel. Exchange rate: 1 USD = 80 INR (hypothetical for simplicity). Cost in USD: 50000 INR / 80 INR/USD = $625 *20% Tariffs:* The steel's value is $625 so the tariff is $125/ton. New cost to US buyer: $625 + $125 = $750 Indian producer receives 50,000 INR, US govt receives $125. US buyer pays $125 more per ton. Note: the above is the simplistic narrative which is pushed on social media (and regular media for that matter) *20% tariffs + free floating currency* Indian steel is less competitive in the US. Market forces rebalance exchange rates to reflect all available trade between the two countries. Assume: INR devalues by 20% to restore competitiveness (hypothetical, usually it's not that clean and doesn't fully offset the effect of tariffs) New exchange rate: 1 USD = 96 INR (20% devaluation) Indian producer still charges $625 to the US customer, but now receives 60,000 INR Note that the tariff represents a point-in-time step change (a shock), not a change in the second derivative of prices, so it has no permanent effect on inflation. Also note that the burden of the tariff is now shifted to India. The producer receives 60,000 INR (up from 50,000) but the devalued rupee means that their purchasing power abroad is weaker. Pre-devaluation, 50,000 INR could buy $625 worth of imported US goods, and now it requires 60,000 INR. Taken collectively, this means that India now pays more for foreign goods and inflation may rise if import dependency is high (not great news for China, btw). As for the US consumer, once they get over the initial tariff shock, it's behind them. The US economy is less affected as the buyer's cost is offset by tariff revenue and policy measures. For instance, if consumers pay 1% higher prices but receive a 10% tax cut, they have come out ahead. 2. *The effects of tariffs are heavily dependent on many factors*, such as relative industry sizes, availability of substitutions, supply chain reshoring, corporate and individual tax regulations, and subsidies to name a few 3. *Tariffs are unlikely to contribute to inflation* as they have a one-time impact and the secondary effects are amplified for net exporters 4. Per point 1, a major caveat is that Chinese currency manipulation by the PBOC prevents the natural rebalancing from occurring (though they pay for it in other ways). However, *it is possible to unilaterally replicate the effect of currency devaluation* through cuts to corporate tax rates and consumption taxes. 5. Prior to tax breaks, the net one-time impact of tariffs is small, about 0.8-2.5% (many analysts estimate this at well under $2000/family of four per year). After tax breaks and underappreciated secondary effects (such as lower oil prices), it is conceivable this may be neutral or even put cash back in the average person's wallet. You may deduce from the above that the impact to GDP is likely to be far less than the fearmongers suggest. Factor in stimulation measures such as deregulation and foreign investment incentive packages, and the case for this being a highly successful economic restructuring becomes much more sound. Some examples of recent EOs and announcements: * Unleashing American Energy (January 20, 2025) * Immediate Measures to Increase American Mineral Production (March 20, 2025) * Unleashing America's Offshore Critical Minerals and Resources (April 24, 2025) * Fast-Track Permitting for Energy and Mining (Announced April 25, 2025) * Coal Industry Revival (April 8, 2025) * Memorandum on Deregulation Without Public Input (April 10, 2025) * America First Investment Policy (February 21, 2025) - eases CFIUS reviews for allied countries and expedites environmental reviews for projects over $1B, while restricting Chinese investments in strategic sectors Deregulation is a very big deal and highly stimulative. Also consider some of the foreign investment packages which have been announced. * Apple: $500B * Softbank: $100B * TSMC: $100B * UAE: $1.4T (wut) over 10 years to sustain investments in AI, semiconductors, energy and US manufacturing * Nvidia: $200B * Eli Lilly: $27B * Hyundai: $20B * J&J: $55B The current announcements amount to over $7 trillion in private and foreign investments, though I would not expect all pledges to materialize. So here's the point. Nobody can tell the future, but if you bought into the tariffs = doom narrative, I can assure you that there is much more complexity here than you probably know. FWIW I make my living from the markets and have done so for some time. My own models put the actual risk of a recession at ~30%, while the odds of a soft-landing (or even very significant growth) are currently at ~60%.

Relative-Sky8455

# Worried about the USD. What should I do to minimize risk? Hello, newcomer here. Not entirely sure if I should post in this sub. I am an international undergraduate student from mainland China studying in the U.S., and I am rather worried about the current state of the U.S. economy. I feel that I am in a difficult position, as saving in either USD or CNY seems risky due to the current geopolitical climate. last year, I bought about 100,000 USD, believing that the exchange rate would go up even further. It seems that the PBOC is managing the exchange rate well, making the USD/CNY hover around the 7.25 to 7.3 range. This money is currently in a FDIC-insured bank, with an interest rate of around 0.04. I am not sure what strategies I should take to minimize risk, as all countries are affected by this trade war. The entire situation is made more confusing due to the USD traditionally being seen as a safe asset, which is why I initially decided to buy so much USD. I have seen some posts and comments suggesting to buy european bonds as they are stable. There are other posts suggesting to buy Silver or Gold, although this is made difficult as I do not have an SSN or ITIN(IRS is still processing my application), and some banks require those to buy stocks and apply for credit cards. I have also considered opening a multi-currency account. After some research, I settled on two banks: East West bank and HSBC. I have found little information on the customer experience of these two banks, either on Reddit or otherwise. I would appreciate any help.

InIce1234

PBOC SETS YUAN MID-POINT AT 7.2074 / DLR VS LAST CLOSE 7.2925 China just fixed the yuan stronger… Basically saying: “We don’t care.” No panic, no devaluation — just a flex. 

cutiesarustimes2

PBOC SETS YUAN MID-POINT AT 7.2055 / DLR VS LAST CLOSE 7.2990 

hey_itsmeurbrother

> They are in the midst of a deflationary spiral you realise China operates under a "managed float" system where the PBOC sets a daily midpoint rate for the yuan against the dollar. it doesn't matter if it's deflationary or inflationary, they make it whatever they want lmao.

deviationblue

Well, that's not entirely true; the PBOC isn't independent, and it's still sitting squarely in the sevens vs the USD.

Lunch_Box86

You are an idiot. China is selling bonds to protect their currency because it is a managed float, meaning it is tied to the position of the dollar. You can even just google "managed float" or "central parity rate" and see that the PBOC keeps a steady peg of +/-2% of the dollar to remain competitive with exports by undervaluing its currency. If China was unloading their treasuries, effectively selling dollars on global markets, it would drive up the price of the Yuan leading to weaker exports and crippling their economy. Not only that, could you even imagine what would happen to China if they decided to sell off all their treasury holdings? It would cause capital flight out of China and hurt their reserves to the point they would end up back in the stone age. Japan is likely selling treasures as a tool for FX intervention to strengthen the yen because it is getting absolutely bodied by the dollar (same with the won, America put South Korea on a currency watch list) and both South Korea and Japan are also probably reassessing their portfolios to balance the need for liquidity and risk management with this spat between China and US. Also, keep in mind, US treasuries are still a global safe haven because there is no alternative. The E.U. is deeply fragmented, China has no capital account convertibility, Japan barely has workers, and BRICS is still 60 years out if it lasts that long. What are you going to invest in? India? lol. You think global investors are ready to swap out treasuries for rupees? TL;DR: Stop pretending like China is pulling the strings and playing 4D chess, it is just central bankers trying not to eat dirt.

TinFoilHat_69

This is so misleading please stop spewing incorrect and inaccurate information. Absolutely — yuan devaluation is one of the most underrated stealth weapons in global economics, ⸻ Yuan Devaluation: The Silent Tax When China devalues the yuan (CNY) against the U.S. dollar or other major currencies, it’s essentially doing this: • Making its exports cheaper to the world (stimulates factory orders), • Making imports more expensive for its domestic market (hurts Chinese consumer purchasing power), • Undermining competitors by dragging down global pricing power. But here’s the kicker: this devaluation is “exporting deflation” to the rest of the world — especially emerging markets and advanced economies trying to maintain domestic industry. ⸻ Who Gets Hurt? 1. U.S. & European Manufacturers • Local factories can’t compete with artificially cheap Chinese goods. • Leads to more outsourcing unless governments add protectionist barriers. 2. Developing Nations (Vietnam, Mexico, India, etc.) • These countries just started building manufacturing capacity to absorb supply chain exits from China. • Yuan devaluation undercuts their margins, slowing diversification away from China. 3. Commodity Exporters (Brazil, Australia, South Africa) • When yuan weakens, China buys fewer commodities or negotiates harder on pricing. • Copper, iron, soybeans, oil — all take a hit. 4. Global Investors Holding Yuan Assets • Devaluation = currency losses. • If you’re holding Chinese bonds, stocks, or real estate, you’re bleeding on the FX side. ⸻ Who Benefits? 1. Export-Centric Chinese Firms • They gain global market share on price alone. • This prolongs the life of otherwise inefficient factories. 2. Chinese Government • Keeps employment steady in politically sensitive regions. • Buys time to manage debt crises in real estate and infrastructure sectors. 3. U.S. Consumers in the Short Term • Ironically, U.S. retailers might get cheaper goods — but this delays re-shoring and reinforces dependency. ⸻ Weaponizing the Yuan: Why It’s Strategic China doesn’t let the yuan float freely — it uses the People’s Bank of China (PBOC) to maintain a currency band. This allows them to: • Ease pressure when global demand weakens (e.g., post-COVID or during trade war), • Offset tariffs by lowering costs artificially, • Retaliate against sanctions or trade restrictions without firing a shot. So instead of tariffs or embargoes, devaluation becomes a tool of economic warfare. Quiet. Powerful. Global. ⸻ Bond Market Impact: Why Things Feel Broken Now tie this back to U.S. bonds trading “like shitcoins” — and you’re onto something bigger. Here’s the loop: • Yuan devalues → global deflation → central banks hold or cut rates → U.S. can’t raise rates too high without killing exports or emerging markets. • Meanwhile, U.S. fiscal deficits explode, foreign buyers reduce Treasury demand, and inflation uncertainty persists. • Bond investors get spooked by rising supply and falling demand — so yields spike, prices drop, volatility rises. That’s why we’re in a weird limbo where: • Inflation isn’t dead, • Rates can’t go much higher, • But the cost of capital is rising everywhere — and China’s FX moves are a big part of that trap. ⸻ You Want to Track It? Here’s What to Watch: 1. USD/CNY Cross Rate If it breaks above 7.30–7.40, China is signaling economic desperation. 2. PBOC Daily Fix vs Offshore Yuan (CNH) The further apart these are, the more China is using stealth intervention. 3. Export/Import Data & FX Reserves When reserves fall while exports are up, China is selling dollars to defend the yuan — and might be near a breaking point

TinFoilHat_69

yuan devaluation is one of the most underrated stealth weapons in global economics, a “tax on every economy,” The Silent Tax When China devalues the yuan (CNY) against the U.S. dollar or other major currencies, it’s essentially doing this: • Making its exports cheaper to the world (stimulates factory orders), • Making imports more expensive for its domestic market (hurts Chinese consumer purchasing power), • Undermining competitors by dragging down global pricing power. But here’s the kicker: this devaluation is “exporting deflation” to the rest of the world — especially emerging markets and advanced economies trying to maintain domestic industry. ⸻ Who takes the hit to the chin? 1. U.S. & European Manufacturers • Local factories can’t compete with artificially cheap Chinese goods. • Leads to more outsourcing unless governments add protectionist barriers. 2. Developing Nations (Vietnam, Mexico, India, etc.) • These countries just started building manufacturing capacity to absorb supply chain exits from China. • Yuan devaluation undercuts their margins, slowing diversification away from China. 3. Commodity Exporters (Brazil, Australia, South Africa) • When yuan weakens, China buys fewer commodities or negotiates harder on pricing. • Copper, iron, soybeans, oil — all take a hit. 4. Global Investors Holding Yuan Assets • Devaluation = currency losses. • If you’re holding Chinese bonds, stocks, or real estate, you’re bleeding on the FX side. 1. Export-Centric Chinese Firms • They gain global market share on price alone. • This prolongs the life of otherwise inefficient factories. 2. Chinese Government • Keeps employment steady in politically sensitive regions. • Buys time to manage debt crises in real estate and infrastructure sectors. 3. U.S. Consumers in the Short Term • Ironically, U.S. retailers might get cheaper goods — but this delays re-shoring and reinforces dependency. China’s secret weapon the yuan- China doesn’t let the yuan float freely — it uses the People’s Bank of China (PBOC) to maintain a currency band. This allows them to: • Ease pressure when global demand weakens (e.g., post-COVID or during trade war), • Offset tariffs by lowering costs artificially, • Retaliate against sanctions or trade restrictions without firing a shot. So instead of tariffs or embargoes, devaluation becomes a tool of economic warfare. Quiet. Powerful. Global. ⸻ Why things are broken - Now tie this back to U.S. bonds trading “like shitcoins” — and you’re onto something bigger. Here’s the loop: • Yuan devalues → global deflation → central banks hold or cut rates → U.S. can’t raise rates too high without killing exports or emerging markets. • Meanwhile, U.S. fiscal deficits explode, foreign buyers reduce Treasury demand, and inflation uncertainty persists. • Bond investors get spooked by rising supply and falling demand — so yields spike, prices drop, volatility rises. That’s why we’re in a weird limbo where: • Inflation isn’t dead, • Rates can’t go much higher, • But the cost of capital is rising everywhere — and China’s FX moves are a big part of that trap. ⸻ Instead of falling into the echo chambers Here’s What to Watch: 1. USD/CNY Cross Rate If it breaks above 7.30–7.40, China is signaling economic desperation. 2. PBOC Daily Fix vs Offshore Yuan (CNH) The further apart these are, the more China is using stealth intervention. 3. Export/Import Data & FX Reserves When reserves fall while exports are up, China is selling dollars to defend the yuan — and might be near a breaking point

InIce1234

The Yuan is the most manipulated currency in the world... The PBOC sets a daily exchange rate and keeps the yuan within a range They are even flexing right now.... [https://www.reddit.com/r/wallstreetbets/comments/1jvf5zp/comment/mmbf2ue/?context=3&utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/wallstreetbets/comments/1jvf5zp/comment/mmbf2ue/?context=3&utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)

panda_sauce

I think the biggest thing holding back China's recovery from slowdown was the PBOC being hesitant to devalue the yuan. Enter Trump and their hand was forced; ironically, rescuing them. Sure, trade slowdown will hurt, but it's not as big an issue as fixing China's existing slowdown.

panda_sauce

The irony here is that the tariffs have forced the PBOC to devalue the yuan, which is what they've needed to do to start climbing out of their existing slowdown. Chinese markets so far seem to be indicating they're winning.

InIce1234

PBOC just set the yuan midpoint (each day they set a "fixing rate" against the dollar) at 7.2092, well above the market close of 7.3445. Looks like they not letting the yuan slide despite the new tariff. They’re trying signaling stability. Quiet move, loud message.... This can be interpreted as a "flex" they want to act calm and controlled.

dilchahtahawwww

PBOC has set the reference rate at 7.0238 to balance the effect of tariffs https://blinks.bloomberg.com/news/stories/SUEN8WT0AFB4

Efficient_Fly_520

There are rumors that the PBOC is ready to devalue the yuan as a counter measure to US tariffs, is that a good idea? On one hand China will be more competitive but on the other hand they'll weaken their own domestic consumer market and be even more export dependent

ThinkingOfTheOldDays

China stocks to 0 organically, but PBOC is buying shares, from what I read.

Hoes_and_blow

They're expecting the Chinese government to inject (via PBOC) more liquidity in the economy, and as in the US, when there's an injection of money in the system, stonks go up...

k3t4mine

Going to be very interesting to see what the PBOC does with the Yaun tomorrow if tarrifs go ahead. They should let it weaken, but I think Blumpf would go ballistic if they did that, and it's the obvious move. Next best retaliation option is to sell US Treasuries and continue to buy gold or Yen. More subtle, harder to see an actual impact immediately.

gopoohgo

The value of the yuan against the dollar is set by the PBOC, it isn't a free floating currency. And manufacturing capacity in China is well off It's highs with reports of people leaving the manufacturing centers back to rural areas as demand slowed.

romt_25

they are bouncing because today they got another PBOC and housing press conference.

romt_25

reminder for all GYNA bagholders MOHURD, PBOC, AND NFRA will hold a press conference on the real estate market on Oct 17th. 

yeezy_boost350v2

PBOC to inject 20B into open market, you good.

tropicalia84

Just wait till the US rolls out a stimulus package double the size of the PBOC hail mary, going to see SPY $700 lightening fast

Delavan1185

Monetary liquidity from PBOC isn't what triggered the surge, though it did help sustain it. What triggered it was the *fiscal* stimulus package. Most of the monetary tweaks are similar to what we've seen over the last couple years of peoperty implosion and haven't moved the needle much. What was new was the fiscal stimulus to boost consumption. It wasn't massive, but it was a real signal, and well-timed. China hasn't wanted to spend because their deficits have been bad enough with the revenue crunch from covid and such. The assumption is CCP finally waking up to the need for government spending to stabilize.

Awkward_Resolve_9511

There’s the Fed, and then there’s the PBOC. Nothing else really matters on a global scale.

tachyonvelocity

The issue is everything you said is actually bullish for stocks on a long run basis. Everything you said translates to, everyone running for the hills, no one wants to own investments because they need liquidity. This literally means, no one owns stocks, no one in China owns stocks, no one in US own Chinese stocks, so it means China is cheap, cheap, cheap because of a liquidity crisis. Post-2008, stocks recovered way, way, way before the economy did. US Real estate prices only bottomed in 2011, when stocks were almost back to all time highs. US Unemployment peaked in 2010, not the stock bottom of early 2009. Home prices don't need to bottom now, as long as investors see a bottom within the next 1-2 years, they will bid up stocks, nor does unemployment. > emergency rate cut for mortgages per decree As soon as you saw this headline, you should've been buying Chinese stocks because you need to front-run the large funds that actually move markets, who themselves front-run the economic recovery. > 3 month after stating there won't be a stimulus the party did a 180 and now goes full whupass on the economy. They didn't do a "180" if you understood economics, and I get that not everyone has an econ degree or knows about global macro, but it wasn't for no reason. The problem with China monetary policy is they literally can't stimulate if the interest rate differential is high between an exporting country and importing countries. If they attempt to stimulate through lower interest rates, it hits their exports from currency depreciation, so doing anything with interest rates is a losing proposition. Since the PBOC is basically subordinate to global interest rates, primarily influenced by the Fed, it makes sense that as soon as the Fed lowered interest rates, PBOC comes out with large stimulus literally 1 day later, precisely because they now have flexibility to stimulate without hurting exports or risk further depreciation.

Internal-League-9085

From perplexity you fuckin racist: The People’s Bank of China (PBOC) recently announced several measures aimed at boosting the Chinese stock market and stimulating economic growth. Here are the key points regarding their policies to increase Chinese stock prices: ## New Equity Facility The PBOC introduced an unprecedented equity facility to support the stock market[2]. This new structural monetary policy tool allows non-banking entities to use high-quality equity holdings as collateral for loans from the central bank. The initial quota for this facility is set at 500 billion Renminbi (RMB)[2]. ## Support for Share Buybacks In addition to the equity facility, the PBOC announced that listed companies can apply for refinancing loans specifically for share buybacks. This measure has a preliminary quota of 300 billion RMB[2]. The primary aim of these initiatives is to bolster market confidence, stimulate investments, and alleviate liquidity constraints faced by businesses[2]. ## Reserve Requirement Ratio (RRR) Cut The PBOC announced a 50 basis point reduction in the reserve requirement ratio (RRR) for banks[1]. This cut reduces the portion of reservable liabilities that commercial banks are required to hold, effectively increasing the amount of money banks can lend or invest[2]. This measure is expected to inject liquidity into the market and potentially boost stock prices. ## Interest Rate Cuts Along with the RRR cut, the central bank implemented a 20 basis point reduction in the 7-day reverse repo rate, lowering it to 1.50%[2]. These rate cuts are aimed at increasing liquidity and boosting demand, which could indirectly support stock prices by stimulating economic growth and investor confidence. ## Forward Guidance PBOC Governor Pan Gongsheng provided clear guidance on potential further RRR and rate cuts, if deemed appropriate[3]. This clear communication on monetary policy has been welcomed by markets and signals the central bank’s commitment to supporting economic growth and, by extension, the stock market. ## Market Response These announcements have led to a significant rally in the Chinese stock market. The blue-chip CSI300 index surged nearly 30% above its February low, with a record-breaking five-day gain of over 25%[2]. This strong market response indicates that investors view these measures as potentially effective in supporting stock prices. While these measures have had an immediate positive impact on the stock market, their long-term effectiveness remains to be seen. The PBOC’s actions demonstrate a clear intent to support the stock market and broader economy, but some analysts suggest that additional fiscal support and structural reforms may be necessary for sustained growth and market stability[3][5]. Sources [1] China central bank releases slate of support measures amid ... - CNBC https://www.cnbc.com/2024/09/24/chinas-central-bank-chief-set-to-hold-press-conference-days-after-fed-rate-cut.html [2] China’s rescue mission - DWS Asset Management https://www.dws.com/en-us/insights/cio-view/cio-flash/cwf-2024/chinas-rescue-mission/ [3] Is China’s fresh stimulus sufficient to support its ailing economy and ... https://www.pwmnet.com/is-chinas-fresh-stimulus-sufficient-to-support-its-ailing-economy-and-markets [4] China’s central bank tries to save the economy—and the stockmarket https://www.economist.com/finance-and-economics/2024/09/24/chinas-central-bank-tries-to-save-the-economy-and-the-stockmarket [5] China’s stimulus measures to boost troubled economy may fall short https://www.piie.com/blogs/realtime-economics/2024/chinas-stimulus-measures-boost-troubled-economy-may-fall-short

allconsoles

https://preview.redd.it/19o8hfes6wrd1.jpeg?width=2556&format=pjpg&auto=webp&s=4849345b2dee318943f95a873120e58345da5f31 All in and agree with all your reasons. Anyone shorting Chinese stocks that have already been down 90% are scared. Don’t fight the PBOC

mtol115

PBOC cutting mortgage rates by 50 bps. Will this pump the market on Monday like the other day?

foo-bar-nlogn-100

$BABA Short china was an overcrowded trade. CCP wants stock market to go up. PBOC giving cheap money to banks to create a stock market bubble. BABA shorts have to cover.

Excellent-Ad676

Last 5 months have been brutal (-50%) but you should be even now. Up 50% just over the beginning of September. YINN caught my attention on the recent PBOC mini-stimi announcement and is looking strong on the 1 year chart...interesting one to follow.

OG_Time_To_Kill

In my opinion, the effect of "stimulus" packages announced by Mainland China could be relatively "huge" this time ... yet will be "short-lived" for stock markets. **(1) swap programme sized at an initial 500 billion yuan - allows funds, insurers and brokers easier access to funding in order to buy stocks** Frankly, the effect of swap programme is "one-off" in nature. 500 billion yuan is not a small amount but it only equates to the daily volume of Shanghai + Shenzhen ... overall sentiment of stock markets in Shanghai and Shenzhen remain weak in view of the slowed domestic economy. **(2) up to 300 billion yuan in cheap PBOC loans to commercial banks to help them fund other entities' share purchases and buybacks** Share purchases / repurchases / buybacks are not common for Chinese listed entities ... large companies do not require these "cheap PBOC loans" to finance their corporate actions while small companies do not have the intention to do so. It is expected that mid-cap may consider yet borrowing new loan under current economic condition could create another "repayment" problem.

AP9384629344432

More broadly, it seems like all the major central banks are pressing down on the gas pedal. [US, Canada, EU, Switzerland, Sweden, UK, New Zealand](https://i.imgur.com/ZTceFPi.png) have all began rate cuts. Others have stopped hiking. Many emerging market economies hiked long before Western countries did and are well into the cutting cycle. Now you have China pumping liquidity into their market--and apparently, this is them [going big](https://x.com/jsblokland/status/1838476709433135352). Measures including a stock stabilization fund. China is a huge player in commodity demand which will benefit major commodity producers like Australia, US, Brazil, Canada, etc. Valuations are rich in the US, but they are not internationally, and you have a concerted effort to push up growth / asset prices... seems pretty bullish to me. Who wants to fight the Fed, ECB, PBOC, BOE, BAC, Riksbank, RBZ, SNB?

AP9384629344432

China is pumping liquidity + most [developed countries](https://i.imgur.com/ZTceFPi.png) are also starting cutting cycles (barring Japan), and we aren't currently in a (global or domestic) recession.... Is this the most obvious of long signals ever or do we fight the Fed... and the ECB, PBOC, BOE, BAC, Riksbank, RBZ, SNB...

foo-bar-nlogn-100

$BABA PBOC money printing to give to chinese companies for buy backs. Shorts will be squeezed.

cinJESUS

TSLA pop because PBOC stimulating China’s economy  puts are fucked

foo-bar-nlogn-100

$BABA PBOC giving cheap money to banks to help companies with buybacks. Shorts are gonna get squeezed since buyback money is coming from a printing press.

romt_25

China to allow funds, brokers to tap PBOC funding to buy stocks  -Bloomberg [Link](https://www.bloomberg.com/news/articles/2024-09-24/china-frees-banks-to-lend-more-cuts-key-interest-rate?srnd=homepage-americas&embedded-checkout=true)

foo-bar-nlogn-100

$BABA. PBOC giving banks facilities yo hep companies with buybacks. Shorts will be squeezed.

MustWarn0thers

I am not understanding at all why the PBOC would choose to not cut rates with their economy as shit as it is and them not even meeting their stated growth targets with barely 2 weeks left in the 3rd quarter, but my remaining JD 28C for 9/27 won't ask any further questions. Yuan strength more important somehow? 

MustWarn0thers

YANG calls going to print this week. China is such a fucking disaster. The cycle of Xi regardation goes      1. Post shit economic data.    2. Release a vague statement about "policy support" via the PBOC that only wishes it had the autonomy of the Fed.    3. Do absolutely nothing.    4. Return to step 1.