Earlier this month, the People’s Bank of China (PBOC) reduced the percentage of liquid reserves some banks are required to hold. Effective May 15, the Chinese central bank estimated that the policy change would release about RMB 280 billion into the system. This RRR discount, however, was only applied to small and medium-sized banks.
The reserve rate for large banks has been the same since late January, when the PBOC allowed for two reductions (on top of three others before them). Monetary officials have been very clear about their goals. This is targeted policy aimed