Meanwhile, sentiments also got a boost after a former member of the monetary policy committee of the People's Bank of China said looser monetary policy won't be sufficient and more government spending is needed to drive economic recovery.
At close of trade, the benchmark Shanghai Composite Index rose 0.04%, or 1.54 points, to 3,524.11. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.19%, or 4.60 points, to 2,392.24. The blue-chip CSI300 index increased 0.16%, or 7.43 points, to 4,786.74.
China's central bank lowered the funding cost of 14-day reverse repos when injecting 150 billion yuan ($23.68 billion) via the liquidity tool into the banking system, to "maintain stable liquidity ahead of the Lunar New Year." The 14-day reverse repo rate was lowered by 10 basis points to 2.25% from 2.35% previously. The week-long holiday starts on Jan. 31.
China's central bank also lowered the one-year loan prime rate (LPR) by 10 basis points and the over-five-year LPR, on which many lenders base their mortgage rates, by 5 basis points on January 20, to enhance monetary policy support for the economy.
CURRENCY NEWS: The onshore Chinese yuan last traded at 6.3316 per dollar after the People's Bank of China lifted the yuan midpoint fix to the strongest level since May 2018. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.3411 yuan per dollar, 0.13% stronger than the previous fix of 6.3492. China allows the yuan to trade within a narrow band of 2% above or below the day's midpoint rate.
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