Economics
China Signals Further Reserve Ratio Cut to Spur Bank Lending
- PBOC Governor due to speak at event in Shanghai Thursday
- Financial markets are anticipating further liquidity injection
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China’s cabinet signaled that the central bank will act to make more liquidity available to banks so they can lend more, including by cutting the amount of money they have to keep in reserve.
China will reduce the reserve requirement ratio and use its relending policy to keep liquidity ample, state television reported Wednesday, citing a State Council meeting chaired by Premier Li Keqiang. The council, which is China’s cabinet, also urged financial institutions to support companies by sacrificing 1.5 trillion yuan ($212 billion) in profits this year by offering lower lending rates, deferring loan repayments and cutting fees.