The People’s Bank of China (PBOC) cut the required reserve ratio (RRR) for financial institutions by another 50 basis points as of Dec. 15 and has now cut it by 1 percentage point this year following a similar cut in July.
PBOC said the move should release 1.2 trillion yuan of liquidity, slightly more than the cut in July that released 1 trillion.
The weighted average RRR for financial institutions will be 8.4 percent after the cut, down from 8.9 percent previously, and prior to the cut the RRR for large financial institutions was 10.5 percent.
PBOC said it would continue to implement “a sound monetary policy,” and would “keep liquidity adequate at a reasonable level, and keep the growth of money supply and the aggregate financing to the real economy (AFRE) basically in line with the nominal GDP growth.
PBOC often uses the reserve ratio to stimulate economic activity and in 2020 the bank’s first move to ease policy at the onset of the COVID-19 pandemic was to cut the ratio for large financial institutions in January after which large amounts of liquidity was injected.
- The British index has updated the historical maximum. Oil lost 5% over the week May 3, 2024
- US Fed tilts towards a rate cut despite the postponement. HKMA left the rate unchanged at 5.75% May 2, 2024
- Brent crude oil hits seven-week low May 2, 2024
- Target Thursdays: USDJPY, Copper & EURCAD May 2, 2024
- WTI oil declines on rising inventories and negotiations between Israel and Hamas. Rising unemployment in New Zealand may force RBNZ to start cutting rates earlier May 1, 2024
- Bitcoin stumbles below $60k ahead of Fed May 1, 2024
- Expert Says Now Looks Like a Good Time To Buy This Renewable Energy Stock Apr 30, 2024
- Optimism over corporate earnings is fueling stock indices. The Hong Kong index reached a 5-month high Apr 30, 2024
- FXTM’s Copper: Hits fresh two-year high! Apr 30, 2024
- European indices grow on the ECB’s “dovish” position. Quarterly reports of mega-companies support the broad market Apr 29, 2024