A weekend announcement from the People's Bank of China on the Reserve Requirement ratio
(This is the amount of cash banks must hold as reserves)
- The cut to the RRR is the 4th of 2018 (so far)
- Cut applies to large commercial banks, joint-stock commercial banks, city commercial banks, non-county rural commercial banks and foreign banks
The cuts to the RRR give a boost to liquidity in domestic markets in China, and are aimed at stimulus; supporting lending and thus domestic demand (that's the intended impact). Exports are being curtailed somewhat by the US tariffs aimed at China, Chinese authorities are seeling a boost to domestic demand to maintain momentu in the economy.