China Boosts Stimulus by Allowing Banks to Keep Smaller Reserves
- PBOC governor says RRR will be lowered by 0.5 ppts on Feb. 5
- Fed’s move away from raising interest rates opens room: Pan
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China said it will cut the reserve requirement ratio for banks within two weeks and hinted at more support measures to come, an unusually early disclosure that shows mounting urgency across President Xi Jinping’s government to shore up the economy and halt a $6 trillion stock-market rout.
The RRR — which determines the amount of cash banks have to keep in reserve — will be lowered by 0.5 percentage points on Feb. 5 to provide 1 trillion yuan ($139 billion) in long-term liquidity to the market, the People’s Bank of China’s Governor Pan Gongsheng told reporters at a briefing.