People’s Bank of China slashed the Reserve Requirement Ratio for a majority of banks by 25bps today. This marks the second such reduction in this calendar year, aiming to spur liquidity in the market and support the economy. Following this adjustment, the weighted average RRR for banks will stand at 7.4%. This strategic step is slated to unleash medium to long-term liquidity exceeding CNY 500B (approximately USD 68.7B) into the financial system.
In the aftermath of this announcement, the offshore Yuan experienced a mild depreciation, fueling a recovery in the USD/CNH from its day low at 7.2603. While fall from 7.3679 could extend lower, strong support is likely at around 7.2387 to contain downside to bring rebound. Break of 7.3145 resistance will bring stronger rise back to 7.3679. But for the near term, some more range trading is likely because USD/CNH would have enough momentum to take on 7.3745 high.
 into the financial system.){kind=link}