PBOC cuts some banks' reserve requirements to boost lending

The People's Bank of China said on Sunday it would cut the reserve requirement rate - the amount of cash that some banks must hold as reserves by 50 basis points (bps), effective July 5. 

The rate cut would release CNY 500 billion in liquidity for the 5 large state banks and 12 national joint-stock commercial banks. 

The latest RRR cuts will also release about CNY 200 billion in funding for mid-sized and small banks to increase lending to small businesses, the PBOC said.

The banks are also encouraged to use the extra liquidity to conduct debt-for-equity swap. 

The total liquidity injection of CNY 700 billion exceeds the market expectation of CNY 400 billion and hence could weigh over the Chinese currency. 



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.