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PBOC announces RRR cuts for some banks effective 2018

The Chinese central bank (PBOC) announced on Saturday that it will cut the Reserve Requirement Ratio (RRR) for some banks effective 2018.

Key Details:

Cuts RRR for banks involved in lending to agriculture and small firms

PBOC will maintain prudent, neutral monetary policy

Will use multiple monetary policy tools to keep liquidity basically stable

Will guide reasonable growth of lending and social financing

Will continue with interest rate, exchange rate reform

Will keep Yuan basically stable

Key Points (via Bloomberg):

Could unleash upwards of 600 billion Yuan ($90 billion) for new lending

Targeted reserve requirement ratio cut is also a signal policy makers don't want to ease monetary policy across the board

PBOC is attempting to push funds to specific places via incentives for commercial lenders

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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