China Cuts RRR by 1 Percentage Point to Bolster Growth
Take me away, mom Animals on the Road	“Water Margin” on eggs Cat the occupier Adorable animals pose like stars Cuddle up together, battling against blizzard Sunshine in the life

 

Reserve requirements for Chinese banks are being reduced as of Monday.

The People's Bank of China has decided to lower the reserve requirement ratio by one percentage point.

The Reserve Requirement is the minimum level of money banks have to hold.

Reducing the amount gives banks more available money to lend.

In making the move, the PBOC is also cutting the reserve requirements by an additional one-percent for banks which specifically lend to small firms, the farming sector and major water projects.

The Agricultural Development Bank of China, the sole policy lender for agriculture, gets an RRR reduction of 2 percentage points.

Zhao Xijun is the deputy dean of the School of Finance with Renmin University.

"It will help maintain economic growth, especially this year when economic growth is facing a significant decline. At the same time, the cut also provides special support to certain areas such as agriculture and small and micro-sized businesses. The cut also helps bolster the overall economic structure of China, as it should help stabilize growth."

This is the second time the Central Bank has brought in an across-the-board reserve requirement cut this year.

The last one was at the beginning of February.

We will have more in-depth analysis on the ratio reduction in the business section in the second half of the program.

Author： 　　　Source：CRI　　　 Editor：Yang Fan