PBOC Releases $188B for Banks in Second Reserve Requirement Ratio Cut

Source: Bloomberg

China scaled back the amount of cash most banks must retain in reserve in a move to counter the economic slowdown. CSI 300  down -0.17%, CNY USD down -0.01%

• China’s Central Bank will lower the reserve requirement ratio by 0.5 percentage points for most banks on Dec.15, releasing 1.2 trillion yuan ($188B) of liquidity.
• The cut was signaled by Premier Ki Keqiang last week, stating that the Chinese authorities would scale back the RRR at the right time to aid small businesses.
• The decision comes after figures indicated that the Chinese economy and industry were stabilizing.
• PBOC stated that the reduction of RRR was a “regular monetary policy action,” pre-empting the move was a decision was the start of an easing period.
• PBOC further signaled that the bank will continue with a normal monetary policy to maintain stability, consistency, and sustainability of the policy.