China Cuts Bank Reserve Requirements to Aid Fiscal Stimulus
- Second reduction in 2023 will help banks digest bond issuance
- Analysts disagree on whether PBOC will cut interest rates
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China’s central bank cut the amount of cash lenders must hold in reserve for the second time this year, a move that will help banks support government spending and Beijing’s broader effort to stoke economic growth.
The People’s Bank of China lowered the reserve requirement ratio for most banks by 25 basis points, in a statement Thursday. The weighted average RRR for banks will be 7.4% after the reduction, effective Friday.