PBoC announces biggest cut in banks’ reserve ratios for two years

Governor says 50bp reduction will free up 1 trillion yuan into financial system

pboc building
The People’s Bank of China

The People’s Bank of China (PBoC) has announced the biggest cut for more than two years in the amount of cash that banks are required to keep in reserve.

The central bank’s governor Pan Gongsheng told a press conference today (January 24) that the reserve requirement ratio (RRR) for financial institutions would be lowered by 50 basis points ton February 5. It is the biggest such cut since December 2021.

The cut will take the average weighted RRR for financial institutions to around 7%. Pan said

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