Reuters reveals China readying measures to stabilize economy after epidemic; market reacts
Reuters reported exclusively that Chinese policymakers are readying measures to support an economy jolted by a coronavirus outbreak that is expected to have a devastating impact on first-quarter growth. China’s central bank is likely to lower its key lending rate – the loan prime rate – on Feb. 20, and cut banks’ reserve requirement ratios in the coming weeks, Reuters sources said. In order to minimize job losses, China’s leaders are likely to sign-off on more spending, tax relief and subsidies for virus-hit sectors, alongside further monetary easing to spur bank lending and lower borrowing costs for businesses.
News of the stringent containment measures, alongside the billions of dollars pumped in by Chinese authorities, boosted mainland China indexes more than 1%. A pan-European equity index and Wall Street futures were up 1%, reversing early losses. MSCI’s global benchmark rose 0.3%.