China’s central bank said Thursday that it would further lower the amount of deposits banks have to set aside as reserves, releasing more liquidity into the nation’s financial system amid slowing economic growth.
The People’s Bank of China said it would cut banks’ reserve requirement ratio by 0.25 percentage point, which would bring the weighted average RRR level for the whole banking system to 7.4%. The cut, which won’t apply to banks whose reserve ratios are already at 5%, takes effect on Friday.
It marks the second RRR cut this year after the first one in March, when the reserve ratio was also lowered by 0.25 percentage point.
The central bank’s move comes a day before China’s statistics bureau is set to release monthly economic indicators.
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