The People’s Bank of China’s reduction of domestic banks’ reserve requirement ratio to counter capital outflows and bolster growth may do little to spur loan demand or assure bankers that the country’s small businesses are worth the risk, The Wall Street Journal reported, citing analysts and business people. Economists said the cut could be the first of several this year along with stepped-up infrastructure spending. “It’s like a pool that is draining, and you put a hose in the pool to offset the draining. But the water level may still go down,” said Conference Board economist Andrew Polk.
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