• Almost half of surveyed economists predict the central bank will lower the reserve-ratio nationwide this year.
  • This comes after it was lowered for some rural banks
  • The tool unleashes about $80 billion of liquidity into the banking system for every half percentage-point reduction

“The changing monetary-policy regime means the reserve ratio has a more material impact because it impacts liquidity in the interbank market,” said Yao Wei, China economist at Societe Generale SA in Hong Kong, who forecasts a half-point cut this quarter. “That changes the interest rates that actually matter.”

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