China slices amount of cash its banks hold as reserves
- BEIJING: China’s central bank said on Friday it was cutting the amount of cash that small and mid-sized banks must hold as reserves, releasing around 400 billion yuan ($56.38 billion) in liquidity to shore up the economy, which has been badly jolted by the coronavirus crisis.
- The latest stimulus move comes as the world’s second-largest economy looks likely to shrink for the first time in 30 years and hopes for a quick recovery are being soured by the rapid spread of the disease worldwide, crushing global demand
- The People’s Bank of China said on its website it will cut the reserve requirement ratio (RRR) for those banks by 100 basis points (bps) in two equal steps, the first effective as of April 15 and the second as of May 15.
- China has about 4,000 small and mid-sized banks. The latest cuts would lower their RRR to 6%.