The People’s Bank of China cut mainland banks’ reserve requirement ratio by 50 basis points effective March 1, lowering the amount of cash major lenders must keep as reserves to 17%, Reuters reported, citing a statement on the central bank’s website. “This reflects the central bank is keen to ease liquidity in the China banking sector,” said Iris Pang, an economist at Natixis in Hong Kong. Pang said the move would release RMB689 billion (US$105 billion) in long-term cash into the economy. Economists said the cut suggested regulators had become less worried that such moves could accelerate capital outflows by devaluing the yuan against the dollar.
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