China's People's Bank cuts reserve requirement ratio by 0.25%p to "strengthen economic recovery foundation"

Sudden Price Cut After 6 Months

The People's Bank of China decided to lower the reserve requirement ratio by 0.25 percentage points as of the 15th to expand market liquidity.

On the 14th, the People's Bank of China announced on its website, "To solidify the foundation for economic recovery and maintain reasonable and sufficient liquidity, the reserve requirement ratio for financial institutions will be lowered by 0.25 percentage points."

Regarding the current Chinese economy, the People's Bank of China evaluated, "Currently, our country's economic operation is continuously recovering, endogenous momentum is steadily strengthening, and social expectations are also continuously improving."

After this reduction, the weighted average reserve requirement ratio in the Chinese financial sector is expected to be about 7.4%, according to the People's Bank of China.

[Image source=Yonhap News]

The central bank's reserve requirement ratio cut is the first sudden move in six months since March.

Previously, the People's Bank of China lowered the reserve requirement ratio by 0.25 percentage points in April and December last year, and in March this year.

This reserve requirement ratio cut is interpreted as a sign of willingness to supply liquidity and stimulate the economy amid the slow recovery of the Chinese economy despite the transition to 'With Corona.'

This content was produced with the assistance of AI translation services.