China’s central bank will likely cut the reserve requirement ratio for major banks earlier than expected as the economic recovery loses steam, according to the latest Bloomberg survey of economists, reports Bloomberg. The People’s Bank of China is expected to cut the ratio—or the amount of cash banks have to keep in reserve—for major lenders by 25 basis points by the end of the third quarter of 2023, according to the median of forecasts. Economists had earlier predicted a cut in the final three months of the year.
A cut by that amount would bring the ratio down to 10.5% from 10.75%. The survey respondents saw the ratio likely to stay on hold until at least the end of 2024 if it’s trimmed this year.
China’s economic recovery has lost momentum in recent weeks after an initial burst in consumer activity. Data this month showed industrial output, retail sales and fixed investment growing at slower paces than expected, while inflation is close to zero and consumers have been reluctant to borrow.
You must log in to post a comment.