(MENAFN) The announcement cuts reserve requirements -the amount of cash banks must hold back from lending - to 19.5 per cent for big banks, a reduction of 50 basis points that would free up USD 96 billion or more held in reserve at Chinese banks, Khaleej Times reported.
"The central bank has tried to use short-term policy tools to inject more liquidity, but such tools were not enough, so it has to cut RRR," said Wen Bin, senior economist at Minsheng Bank in Beijing, adding that signs of increasing capital outflows and a sliding domestic currency were particularly worrying.
"Today's announcement isn't a surprise," wrote Mark Williams of Capital Economics in a research note reacting to the news. "It is consistent with the more accommodative stance being taken since the benchmark interest rate cut."
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.