Economics
PBOC Cuts Reserve Ratio in Tweak to Steady China Bank Liquidity
- SocGen says move will ease the pain of financial deleveraging
- PBOC’s RRR currently stands at 17% for large commercial banks
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The People’s Bank of China said it will cut the reserve-requirement ratio for some banks to reduce their funding costs and in turn help ease conditions for businesses and individuals.
The 1 percentage point reduction takes effect April 25, the central bank said late Tuesday. About 900 billion yuan ($143 billion) of outstanding medium-term lending facility loans will be repaid on the day of the cut and another 400 billion yuan will be unleashed, it said in a statement.