China’s central bank and financial regulators announced sweeping policy steps Wednesday, including interest rate cuts, as Beijing ramps up efforts to bolster growth amid mounting trade worries.

China will cut the seven-day reverse repurchase rates by 10 basis points to 1.4% from 1.5%, the People’s Bank of China Governor Pan Gongsheng said at a press briefing. That will bring down the loan prime rate, the main policy rate, by around 10 basis points, the governor said.

The central bank will also lower the reserve requirement ratio, which determines the amount of cash banks must hold in reserves, by 50 basis points, unleashing additional liquidity of 1000 billion yuan ($138.6 billion) to the market.

The lower policy rates will come in to force Thursday, while the RRR relaxation will be effective May 15, according to state media Xinhua.

The officials also announced measures to support financing for several key sectors, including technology and real estate, along with establishing of a 500-billion-yuan relending tool for consumption and elderly care.

The PBOC will reduce the mortgage rates under the nation’s housing provident fund, a government-backed housing lender, by 25 basis points. Rates on five-year loans for first-time homebuyers will be trimmed to 2.6% from 2.85%, the governor said. 

It will also gradually lower the amount of cash that auto financing firms must hold in reserves to zero from the current 5%.

These measures, however, may have limited impact on boosting domestic credit demand, said Tianchen Xu, senior economist at Economist Intelligence Unit, “borrowing has been somewhat insensitive to interest rates.”

China is also preparing more measures to support small and medium enterprises and the private sector, which will be announced soon, Li Yunze, the head of the financial regulatory administration, said at the briefing. The government has ramped up efforts in recent weeks to help businesses impacted by the tariffs and boost employment.

The broad stimulus announcements Wednesday showed the officials were acting with greater urgency to bolster the economy and the easing depreciation pressure on Chinese yuan has created more desirable condition, analysts said.

Chinese offshore yuan has regained some ground to hover near the key 7.20 threshold, after weakening to a record low of 7.4287 per U.S. dollar earlier this month. It depreciated modestly to trade at 7.2227 per U.S. dollar following the Wednesday briefing.

“There is no longer pressure on the RMB to depreciate against the dollar. In this context, PBOC doesn’t need to worry about the risk of rate cut and RRR leading to capital outflows and RMB depreciation,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

New fiscal policy measures are, however, missing and may only be unleashed when policymakers see concrete signs of economic deterioration, Zhang said.

Despite hinting repeatedly that it had sufficient policy firepower to deploy “when appropriate,” Beijing had largely opted for piecemeal stimulus measures this year. In a high-level economy policy setting meeting in April, Chinese top policymakers urged the country to prepare for “worst-case scenarios” with sufficient planning.

“Policymakers are likely now privy to some of the early data on how the economy is being impacted by the tariff shock,” said Lynn Song, chief economist for Greater China at ING, flagging that “there is [still] room for further policy easing,” citing deflationary pressure and moderating growth.

He expects further 20 basis points of cuts in the interest rates and 50-basis-point reduction in the RRR this year, while noting “the next move may not come until after the Fed resumes its rate cuts.”

The yields on China’s benchmark 10-year government bond were little changed at 1.636 on Wednesday, according to LSEG data.

The press conference took place hours after Beijing’s affirmation that Chinese Vice Premier He Lifeng will hold talks with U.S. Treasury Secretary Scott Bessent in Switzerland later this week to discuss tariff and trade matters, in the latest sign that negotiations could begin between the two sides.

Those would be the first confirmed trade talks between the two countries since U.S. President Donald Trump ratcheted up tariffs on Chinese goods to an eye-watering 145%, prompting Beijing to retaliate with additional levies of 125% on imports from the U.S.

The planned talks could mark a turning point in ongoing trade war that has rattled markets and crippled trade between the world’s two largest economies.