Statement reads (in part):

  • “In light of changes in the current situation, we will encourage large banks with higher provisions to lower provision ratios in an orderly manner and will use monetary policy tools, including RRR cuts, in a timely way,”

This from China's Cabinet late on Wednesday. The People’s Bank of China (PBOC) is not independent, it'll follow such guidance/instruction from the cabinet (State Council).

The last time the Bank cut the RRR was in December 2021, a 50bp cut.


RRR is Reserve Requirement Ratio, the amount of cash that banks must hold as reserves. A cut to the RRR frees funds for lending into the system.