The People’s Bank of China has reduced the amount of cash almost all banks must keep in reserve in an effort to strengthen the economy’s recovery from pandemic restrictions.
China cut the amount of cash banks must keep in reserve at the central bank in an effort to support lending and strengthen the economy’s recovery from pandemic restrictions and a property market slump.
, with unemployment still elevated, property investment continuing to contract and falling exports dragging on industrial output.“It seems that the central bank is not going to slow the pace of credit growth as people feared,” said Xing Zhaopeng, senior China strategist at Australia and New Zealand Banking Group Ltd.
The PBOC said the cut in the reserve ratio was aimed at maintaining “reasonable and sufficient liquidity” and ensuring that money supply increases in line with nominal economic growth. The central bank added it won’t engage in “flood irrigation,” a term it uses to refer to large stimulus.
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