The People’s Bank of China is preparing to cut the deposits banks are required to hold in reserve, flooding the banking system with liquidity to boost lending, The Wall Street Journal reported, citing unnamed officials and advisers to the central bank. The new move signals that the Chinese central bank’s exchange-rate maneuvering in the past two weeks is backfiring, forcing it to again resort to (thus far unsuccessful) reserve-requirement reduction. The move, which could come before the end of this month or early next month, would involve a half-percentage-point reduction in the reserve-requirement ratio, potentially releasing RMB678 billion (US$106.2 billion) in funds for banks to make loans.
You must log in to post a comment.
Yes, I would like to receive emails from China Economic Review. (You can unsubscribe anytime)
Copyright © 2018 SinoMedia Group Limited All rights reserved