China has stepped up efforts to stimulate the economy and support its currency amid lingering investor concerns about growth prospects
The central bank will reduce for the first time this year the amount of foreign currency deposits that banks are required to hold as reserves, the People’s Bank of China said on Friday.
The decision came hours after authorities announced a stimulus for the battered real estate sector and unveiled plans to expand tax breaks for child and parental care and education.
The down payment and mortgage rate have also been lowered.
The minimum initial down payment will be 20% for first-time buyers and 30% for repeat buyers.
China is also proposing to remove restrictions on buying homes in non-core areas of major cities such as Beijing, Shanghai and Shenzhen.
Such restrictions, including on the number of properties people can buy, have been in place in many cities since 2010.
The PBOC has ramped up support for the currency via tools such as setting a stronger-than-expected daily reference rate, prompting state banks to sell dollars and tightening offshore yuan liquidity to squeeze shorts.
The measures are the latest move to boost confidence in the world’s second-largest economy, which is sagging under the weight of the ongoing housing crisis, weakening global demand and rising unemployment.