China’s PBoC announced to cut reserve requirement ratio for the second time this year to release CNY 550B of liquidity. RRR would be cut by 50-100bps from the original levels. The RRR cut will be effective next Monday. Banks which passed the annual review regarding lending to small companies will be qualified for the RRR reduction.
The central bank is “making its prudent monetary policy more flexible and appropriate,” the PBOC said in the statement. “The restoration and development of the real economy is being put in a more prominent position, while excessive liquidity will be avoided.”
