Peo­ple's Bank Re­laxes Re­serve Re­quire­ment Ra­tio

NewsChina - - NEWS BREIF -

The Peo­ple's Bank of China (PBOC), China's cen­tral bank, an­nounced on Oc­to­ber 7 that it would lower the re­serve re­quire­ment ra­tio for com­mer­cial banks (RRR, the sum com­mer­cial banks are re­quired to hold in re­serve) by one per­cent as of Oc­to­ber 15.

It was the PBOC'S fourth RRR cut for 2018. The bank said it was in­tended to en­able com­mer­cial banks to have more funds to re­pay their dues and bet­ter sup­port the real econ­omy by grant­ing more loans to mi­cro-and-small-sized en­ter­prises. PBOC told me­dia that the lat­est RRR cut would help re­lease a to­tal of 1,200 bil­lion yuan (US$173B) in funds.

The PBOC has de­nied that the lat­est cut is a sig­nal of eas­ing mone­tary pol­icy. It em­pha­sized to me­dia that the cut fo­cuses on op­ti­miz­ing the struc­ture of fund­ing liq­uid­ity by guid­ing the des­ti­na­tions of com­mer­cial bank loans. Given it is tar­geted, it should not in­crease the risk of Chi­nese yuan de­pre­ci­a­tion, the PBOC said.

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