Goldman Says China Won’t Cut Reserve Requirement Ratio This Year

Goldman Sachs Group Inc. economists say they no longer expect China to cut the amount of cash banks must hold in reserve this year after the central bank pledged to keep overall liquidity conditions relatively stable.

The probability of a cut in the reserve requirement ratio is lowered, and the People’s Bank of China might rely on open market operations, its medium-term lending facility and targeted tools instead to keep liquidity supply and demand relatively stable, Goldman economists including Maggie Wei and Hui Shan said in a report Saturday.