IDCBY - China's central bank reduces banks' reserve requirements to bolster lending

bingdian/iStock via Getty Images The People's Bank of China will lower the amount of funds that banks are required to keep at the central bank, a move that injects $154B (~$24B) of liquidity into the banking systems in an effort to increase loans to the country's small businesses. The PBOC said it will cut the reserve requirement ratio ((RRR)) by 0.5 percentage point on July 15, its first cut since April 2020 when Beijing took steps to stimulate the economy hit by the pandemic. The move could help reduce funding costs for Chinese lenders by CNY 13B ($2B) each year, China's central bank said. It will bring the weighted average reserve ratio for China's banking system to 8.9%, it added. The RRR cut will apply to almost all banks in China, except some small lenders that only operate in rural areas and whose RRR is 5%, the PBOC said. The

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China's central bank reduces banks' reserve requirements to bolster lending