Bank Reserve Requirement Cut By PBOC
Beijing officials have elected to cut reserve requirements for the nation’s biggest banks by 50 basis points or 0.50% – the third time in the last six months. The move doesn’t come as a surprise as dour economic data last week revealed a softer than anticipated Chinese economy. Both retail sales and industrial production figures increased softer than expected, as consumer prices slowed for the third straight month, rising by only 3.4%. The new rate now leaves most major banks with a RRR of 20%.
The decision will likely bolster markets in Asia, particularly in Hong Kong and China as the move will widely be received as expansionary. It also follows suit with many other Asian economies in recent days, that have elected to lower interest rates or bolster stimulus plans in order to stem any further slowdown in the region.
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