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Bloomberg
China’s central bank will increase the supply of cheap funding to banks by cutting the amount of cash they need to hold as reserves, a move aimed at putting a floor under economic growth in 2020.
The required reserve ratio for commercial lenders will be lowered by 50 basis points from Jan. 6, unleashing about 800 billion yuan ($115 billion) of liquidity into the financial system, the People’s Bank of China said on its website. The cut aims to help banks reduce their lending rate to businesses, the PBOC said. Currently, the required reserve ratio is 13% for big banks and 11% for smaller ones.
The injection will be offset as banks provide more cash to the public before the Spring Festival, and the overall liquidity level at banks will be kept stable,the PBOC said.