China to Ramp Up Monetary Stimulus as Growth Outlook Darkens
- Reserve requirement ratio may be cut, possibly this week
- Nomura cuts growth outlook as Covid surge prompts lockdowns
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China signaled more monetary stimulus was on the cards, including a likely cut to the reserve requirement ratio for banks, as it ramps up support for an economy under strain from surging Covid cases and more lockdowns.
The State Council said in a statement Wednesday that monetary tools “such as a RRR cut” will be used “in a timely and appropriate manner” to maintain reasonably ample liquidity. A cut in the RRR -- the amount of cash banks must keep in reserve -- could land as soon as this week, given the central bank usually imposes a reduction within days of a cabinet statement such as this.