Daily News and Transactions across Greater China from Knight Frank
China cuts its reserve ratio again
May 14, 2012
China's central bank announced that it would lower the reserve requirement for commercial lenders by 50 basis points, the second time it has taken such action this year to inject more market liquidity and shore up the economy.
An economist says, the cut would release about RMB400 billion into the market, effective May 18. After the cut, the reserve requirement ratio (RRR) for major banks will stand at 20%, while for small and medium-sized lenders, the ratio will be reduced to 16.5%.
Another economist says conditions are right for another RRR cut in May. Renewed political risks in the euro zone and a sharp fall in market liquidity led by a drought in maturing central bank bills called for further easing of monetary policy.
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