China’s central bank PBoC announced to lower the reserve requirement ratio (RRR) by 0.25%, effect December 5. That’s the second cut this year, last being in April. The move is expected to released around CNY 500B in long-term liquidity to support the economy.
PBoC sad in a statement the the cut is aimed at “keeping liquidity reasonably ample” and “increasing the support for the real economy.” It will also help banks support industries troubled by the pandemic.
USD/CNH is staying in tight range after the announcement. Current development suggests that correction from 7.3745 might have completed at 7.0191 already, ahead of 7.0000 psychological level. Sustained break of 7.1714 support turned resistance will affirm this case, and bring stronger rise back to retest 7.3745 high.
