The PBOC said in a statement that after the cut, the weighted average RRR of Chinese financial institutions would be 8.4%.
The latest RRR reductions are expected to release 1.2 trillion yuan (about $ 188.4 billion) in long-term funding. The statement added that some of the released funds will be used to repay mature medium-term lending facilities and the rest will be used to replenish long-term funds to better meet the needs of market actors. ..
To support economic development, the People’s Bank of China (PBOC), the central bank of China, has decided to reduce the reserve requirement ratio (RRR) of financial institutions by 0.5 points from December 15. It does not apply to financial institutions that already have a 5% RRR.
According to PBOC calculations, this reduction will also reduce financial institutions’ funding costs by approximately 15 billion yuan annually.
The PBOC said financial institutions can actively use the released funds to strengthen support for the economy, especially SMEs, and reduce comprehensive funding costs.
Fiber2Fashion News Desk (RKS)
Central bank of China reduces reserve requirement ratio to support economy
Source link Central bank of China reduces reserve requirement ratio to support economy