Mike had the headlines as they hit in his morning: PBOC cuts RRR for some rural banks in China

More:

  • People’s Bank of China (PBOC) will cut the deposit reserve requirement for rural financial institutions: 2% cut for rural commercial banks and a 0.5 percentage point cut for rural cooperatives
  • Will take effect from Friday
  • This takes the reserve requirement for rural commercial banks to 15%; rural cooperatives to 13% (compared to most large Chinese institutions, required to maintain a 20% deposit reserve ratio)
  • Note: From MNI, quoting an unnamed source: “In 2010, the PBOC launched the differential management of the reserve requirement for banks. This reserve cut for county and town rural financial institutions is just a continuation of that policy”
  • Source further said that, a system-wide reserve cut in the current quarter is “unlikely”

Further:

  • PBOC said in a statement that the cut is designed to support agriculture and “doesn’t suggest any change in the prudent monetary policy bias.”
  • Analysts estimate that the cut may release as little as CNY50 billion into the economy

Note also:

A senior government source, who helps formulate Chinese economic policy at the highest reaches of government, told MNI Monday that the likelihood of stimulus policies to boost growth is “remote”.

With thanks to the good people at MNI!