The PBoC cuts the mandatory reserve ratio of banks by 25 basis points

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The People’s Bank of China (PBoC) announced on Friday that cuts banks’ reserve requirement ratio (RRR) by 25 basis points (bp), effective March 27.

Additional comments

The weighted average of the RRR for financial institutions will be around 7.6% after the new cut.

The RRR cut will exclude financial institutions that have applied a 5% RRR.

No stimulus similar to a “monetary flood” will be used.

Reasonably ample liquidity will be maintained.

The offer will be improved in the key areas and in the weak links.

will apply a prudent, precise and forceful monetary policy.

The money supply and total social financing will remain basically in line with nominal economic growth.

Total credit will be maintained at adequate levels.

Source: Fx Street

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