China to cut banks’ reserve requirement ratio by 50 basis points

Beijing. June 26. Silkroadnews – On July 5 China will reduce the reserve requirement ratio of some banks (RRR) by 50 basis points, People’s Daily wrote referring to the country’s central bank’s statement.
The People’s Bank of China (PBOC) will cut the RRR for most banks to support qualified debt-to-equity swap programs and help small businesses in financing, the report reads.
The step is being taken as a part of the implementation of the decisions made at the meeting of the executive council of the State Council of the People’s Republic of China on June 20. Targeted reductions in banks’ RRR and other monetary policy instruments will be used to stimulate lending to small and micro businesses.
The funds released as a result of this reduction will amount to about 700 billion yuan (about $108 billion), with 200 billion yuan to be used to mitigate the credit strain for small and micro businesses.
An earlier cut to the benchmark RRR was in April 25, when the rate was lowered by 1 percentage point to help small businesses and to improve overall stability and liquidity in the economy, the publication says.