A senior economist at Postal Savings Bank of China says he thinks the People's Bank of China may cut the RRR for all banks by 0.25 percentage points
- The reduction in the cash amount banks must hold in reserve is expected to free up about 550 billion yuan ($77 billion) in long-term liquidity.
- "Using RRR cuts, China will not only encourage banks to step up support for the real economy, but also lower their borrowing costs, thus helping banks to surrender part of their profits to support the real economy. The long-term funds freed by the reduction is also conducive for banks to provide long-term financing for the economy,"
Further, a senior researcher at the Zhixin Investment Research Institute, said COVID-19 cases have resurged in a number of Chinese cities this month, and this has affected the recovery of the real economy to some extent.
- "As demand is still insufficient and market sentiment is unstable, it is necessary for China to take measures like cutting the RRR to send a positive signal for the economy, boost financial market confidence, maintain market stability, and create a favorable financial environment for economic stabilization and recovery," Wang said.
Info comes via China. org.
Momentum appears to be building to an inevitable cut.