ZCZC
BCN-15
CHINA-BANK-ECONOMY
China’s Central Bank to cut reserve requirement ratio for fourth time
BEIJING, Oct 7, 2018 (BSS/AFP) – China’s central bank announced Sunday it
would reduce the reserve requirement ratio (RRR) for most banks by one
percentage point, the fourth time this year the country has sought to free up
credit for businesses as they face down $250 billion in US tariffs.
The move to cut the amount of cash which most commercial and foreign banks
must hold in reserve, to repay loans obtained via the central bank’s medium-
term lending facility, will take effect on October 15.
The decision is intended to “further encourage the stable development of
the real economy, optimise the liquidity structure of commercial banks and
financial markets, lower financing costs, and to continue increasing the
financial systems’ efforts to support small businesses, private enterprise
and innovation,” the People’s Bank of China said in a statement.
The move will be used to pay down 450 billion yuan ($65.6 billion) of
medium-term lending facilities, it said, adding that it could also free up
another 750 billion yuan in funds.
The move is not expected to put depreciatory pressure on the yuan, the
statement said, adding that the bank would continue to maintain a “prudent
and neutral” monetary policy.
It is the fourth such move this year, as China seeks to blunt the economic
impact US President Donald Trump’s imposition of $250 billion dollars of
Chinese goods, roughly half of country’s exports to the US.
BSS/AFP/HR/1320