Economics
China Cuts Banks' Reserve Requirement Ratio
- RRR will drop to 17% for biggest banks; still high globally
- Move follows up on signals in recent days of more easing
China Cuts Reserve Ratio in Latest Economic Boost
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China’s central bank stepped up efforts to cushion its economic slowdown amid plunging stock prices and a weakening currency, cutting the amount of cash the nation’s lenders must lock away.
The required reserve ratio will drop by 0.5 percentage points effective March 1, the People’s Bank of China said on its website Monday. That will take the level to 17 percent for the biggest banks, still one of the highest such ratios in the world. The move marks a return to more traditional easing after the central bank indicated in recent weeks it would spur growth by guiding interbank markets lower and injecting liquidity through open-market operations.