China: PBoC cut reserve requirement – TDS

The People’s Bank of China (PBoC) cut its reserve requirement for some banks, taking effect on 16 March, analysts at TD Securities report. USD/CNY is sitting at 6.98.

Key quotes 

“The RRR will be cut by 0.5% to 1% under its inclusive finance scheme while an additional 1% cut in the RRR will be implemented for Qualified Joint-Stock Banks. PBoC estimates this will release CNY 550bn of long-term funds.” 

“Official emphasis on funding and liquidity enhancement has been reflected in the urging by the State Council to cut the reserve requirement ratio for banks, and subsequent decline in the overnight repo rate.”