SocGen says that China's RRR cut is meant to ease deleveraging pain

Comments by SocGen's chief China economists, Yao Wei

Yao says that the move by the PBOC here is part of its efforts to mitigate the "pain" of deleveraging. Adding that "as shadow credit growth is falling quickly now, banks need all the help they can get to sustain formal bank lending".

The move earlier will also be welcome with open arms in the equities market I reckon, after the mini-rout encountered by Chinese stocks to start the week.

China's Shanghai Composite and CSI 300 indices have fallen by 2.9% and 3.2% respectively over the last two days.