Markets surge as PBoC cuts RRR

The People’s Bank of China

The People’s Bank of China unveiled a cut to the reserve requirement ratio (RRR) on January 1 – welcome news to many global investors.

The 50-basis-point cut will take effect on January 6, the PBoC said in a statement. Despite the easing measure, policy-makers said they were retaining a “stance of sound monetary policy” and promised to “refrain from flooding the market with liquidity”.

“A broad cut of RRR this time serves as a countercyclical adjustment and releases more than RMB800 billion (

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