Estimate of the likely PBoC move is an RRR cut of 25 basis points for all banks

A senior economist at Postal Savings Bank of China says he thinks the People’s Bank of China may cut the RRR for all banks by 0.25 percentage points

  • The reduction in the cash amount banks must hold in reserve is expected to free up about 550 billion yuan ($77 billion) in long-term liquidity.
  • “Using RRR cuts, China will not only encourage banks to step up support for the real economy, but also lower their borrowing costs, thus helping banks to surrender part of their profits to support the real economy. The long-term funds freed by the reduction is also conducive for banks to provide long-term financing for the economy,”

Further, a senior researcher at the Zhixin Investment Research Institute, said COVID-19 cases have resurged in a number of Chinese cities this month, and this has affected the recovery of the real economy to some extent.

  • “As demand is still insufficient and market sentiment is unstable, it is necessary for China to take measures like cutting the RRR to send a positive signal for the economy, boost financial market confidence, maintain market stability, and create a favorable financial environment for economic stabilization and recovery,” Wang said.

Info comes via China. org.

Momentum appears to be building to an inevitable cut.

This article was written by Eamonn Sheridan at forexlive.com.      



Author: AliensFaith
HighTech FinTech researcher, university lecturer & Scholar. He is studying his second doctoral degree at the Hague International University. Studying different fields of Sciences gave him a broad understanding of various aspects of life. His recent researches covered AI, Machine-learning & Automation concepts. The Information Technology Skills & Knowledge gave his company a higher position over other regional high-tech consultancy services. The other qualities and activities which can describe him are a Hobbyist Programmer, Achiever, Strategic Thinker, Futuristic person, and Frequent Traveler.
%d bloggers like this: