Economics
China to Unleash $108 Billion in Reserve Cut for Some Banks
- Of the total, 500 billion yuan is for debt-equity swaps
- 200 billion yuan is for smaller banks to lend to small firms
Saxo Capital’s Eleanor Creagh discusses China’s decision to cut the RRR, and the implications for the stock market.
(Source: Bloomberg)This article is for subscribers only.
China’s central bank will cut the amount of cash some lenders must hold as reserves, unlocking about 700 billion yuan ($108 billion) of liquidity, as it seeks to control leverage and support smaller companies.
The required reserve ratio for some banks will drop by 0.5 percentage point, effective July 5, the People’s Bank of China said on its website. That’s the day before the U.S. and China are scheduled to impose tariffs on each other.