China’s senior-most government authority has flagged a further reduction in the reserve requirement ratio (RRR) for Chinese depository institutions, in order to unleash funds to bolster the economy.
A meeting of the State Council convened by Premier Li Keqiang on 22 November said that cuts to the RRR would be part of a raft of forthcoming and ongoing measures to support the health of China’s economy.
The State Council called for the “use of monetary policy tools including implementation of cuts to the RRR when appropriate” in order to “maintain rationally ample liquidity.”
The meeting also called for “expanding the intensity of financial support for the real economy…guiding banks to appropriately transfer profits for outstanding micro-and-small financial inclusion loans, continuing to effectively perform transportation and logistics financial services, and expanding the intensity of support for bond issuance by private enterprises.”
