China central bank to cut sector-specific rates to boost economy

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PBOC cuts rates on structural policy tools by 25 bps

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Move seen as signaling possible benchmark rate reductions

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PBOC has some room for rate, reserve ratio cuts, deputy gov says

BEIJING, Jan 15 (Reuters) - China's central bank announced on Thursday cuts to sector-specific interest rates to provide an early boost to the ?economy, and signalled it has room this year for further reductions in banks' cash reserve requirements and for broader rate cuts. The People's ?Bank of China (PBOC) said it would lower interest rates on its structural monetary policy tools ?by 25 basis points on January 19 - a move that tends ?to have a limited ?impact on growth compared with cuts to benchmark policy rates. Structural monetary policy tools are central bank instruments designed to target specific ?sectors or areas of the economy, such as small ?firms, tech innovation and green development. Outstanding loans made via structural tools totalled 5.9 trillion yuan ($846.84 billion) at the end of March 2025, central bank data showed. ?No updates have been released since.

Analysts at ?Standard Chartered ?Bank estimate that structural tools account for about 13% of the PBOC's balance sheet.

"The move is aimed at boosting support to major strategic areas and weak links in the economy," ?the central bank said in a statement. China's economic growth is expected to decelerate in 2026 compared to 2025 and maintain the same pace in 2027, according to a Reuters poll. The forecast underscores the pressure on policymakers to address structural vulnerabilities and deploy additional measures to sustain long-term growth.

"In recent years, China has a practice of frontloading stimulus at the start of a ?year. After ?the rate cut on structural tools, it probably won't take very long to see a full policy rate cut," said Tianchen Xu, senior economist at the Economist Intelligence Unit.

Zou ?Lan, deputy PBOC governor, told a news conference that there is room for the central bank to cut interest rates and reserve requirement ratios this year.

China's yuan, eased right after the PBOC announcement, but quickly pared some of these losses.

The central bank said it would expand its re-lending programme for tech innovation by 400 billion yuan ($57.37 billion) to 1.2 trillion yuan, providing cheap loans to small and midsize tech companies.

Additionally, the ?lending quota for agricultural and small enterprises will be raised by 500 billion yuan, while a separate 1 trillion yuan relending facility will be established to support small and medium-sized private firms.

($1 = 6.9671 Chinese yuan renminbi) (Reporting by Kevin Yao, Ethan ?Wang and Ryan Woo in Beijing, Winni Zhou in Shanghai; Editing by Jacqueline Wong and Ed Osmond)