All articles tagged with #reserve requirement ratio
China's central bank is cutting the reserve requirement ratio for commercial banks, injecting 1 trillion yuan into the market to quell panic and boost investor confidence. The move is part of efforts to maintain ample liquidity and support small firms and agricultural businesses, with the Hang Seng Index in Hong Kong rallying and the Shanghai composite index closing up as a result.
China is facing a deepening deflationary crisis as the Consumer Price Index (CPI) dropped 0.5% in November, the largest fall since the pandemic began. This has prompted calls for urgent action from Beijing to boost demand and prevent a downward spiral of prices. The country has been battling weak prices throughout the year due to a property market slump and weak spending. The worsening deflationary pressure raises doubts about China's economic recovery, and analysts are urging policymakers to take immediate action to prevent a vicious loop between deflation, confidence, and economic activity. Investors are eagerly awaiting details from the upcoming Central Economic Work Conference for insights into next year's economic policy, including potential cuts to the reserve requirement ratio and interest rates.
Several Chinese commercial banks, including China Merchants Bank, China Citic Bank, and China Minsheng Banking, have cut interest rates on yuan deposits to ease pressure on profit margins. This follows a similar move by China's biggest state lenders on Friday and marks the second such industry-wide cut within a year. Analysts expect the deposit rate cuts will provide more room for a further cut soon by the central bank in the reserve requirement ratio (RRR) to expand credit and boost investment spending.
China's central bank, the People's Bank of China (PBOC), has made a surprise cut to the reserve requirement ratio (RRR) for almost all banks by 0.25 percentage points, effective March 27, in an effort to keep money flowing through the financial system and prop up the economy. The move came as a surprise and follows a week of turmoil in global financial markets triggered by the failure of some regional US banks.