China Promises to Cut Banks’ Reserve Requirements

China’s economic outlook has worsened of late, with the country’s Covid outbreak showing few signs of easing despite an extended lockdown of Shanghai and other cities

(Bloomberg) — China’s cabinet said the central bank would cut the amount of money that banks have to keep in reserve ― the required reserve ratio, or RRR ‒ at the proper time, a further sign that there is likely to be additional monetary stimulus to support the economy.

“China will use monetary policy tools including a RRR cut at an appropriate time and will step up financial support to the real economy, especially industries and small businesses that have been hit hard by the pandemic,” the State Council said Wednesday after a meeting, according to state-run television. The People’s Bank of China (PBOC) usually announces a reduction within days of the State Council making such a statement.