Caixin
Nov 25, 2022 07:30 PM
FINANCE

PBOC to Cut Banks’ Reserve Requirement Ratio to Support Economy

The headquarters of the People’s Bank of China in Beijing on Nov. 4. Photo: VCG
The headquarters of the People’s Bank of China in Beijing on Nov. 4. Photo: VCG

China’s central bank announced it will cut the amount of cash lenders need to keep in reserve, injecting about 500 billion yuan ($70 billion) into the financial system to keep liquidity ample and support sectors and small companies “severely impacted” by the Covid-19 pandemic.

The People’s Bank of China (PBOC) will lower financial institutions’ reserve requirement ratio (RRR) by 25 basis points on Dec. 5, according to a statement on its website Friday. The weighted average RRR of financial institutions will fall to around 7.8%. It is the second reduction this year — in April the ratio was also cut by 25 basis points, releasing around 530 billion yuan of liquidity into the financial system.

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