{"id":29605,"date":"2012-05-12T17:22:00","date_gmt":"2012-05-12T21:22:00","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/05\/peoples-bank-of-china-cuts-rrr-50-basis-points\/"},"modified":"2012-05-12T17:22:00","modified_gmt":"2012-05-12T21:22:00","slug":"peoples-bank-of-china-cuts-rrr-50-basis-points","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/05\/12\/peoples-bank-of-china-cuts-rrr-50-basis-points\/","title":{"rendered":"People’s Bank of China Cuts RRR 50 basis points"},"content":{"rendered":"

By Central Bank News
\nThe People’s Bank of China<\/a> (PBOC) announced a 50 basis point cut in the required reserve ratios<\/a> (RRR) for deposit taking financial institutions, effective 18 May 2012.  The new required reserve ratios will average 20.00% for large banks, and 18.00% for small banks.  The move is expected to add as much as 400 billion yuan of liquidity to the financial system.  The move marks a continued shift in the policy bias to loosening, with the PBOC previously being content to use open market operations to adjust liquidity, in contrast to the higher profile RRR.<\/span>
<\/a>
<\/a>The last reduction in the RRR was a <\/span>50 basis point cut<\/a> in February this year, while the People’s Bank of China last raised the <\/span>reserve requirements<\/a> by 50 basis points in June 2011 to peak at an average 21.50% for large banks, and 19.50% for small banks.  The PBC also <\/span>adjusted<\/a> the reserve requirement rules in August, effectively resulting in tightening of about 100bps.  Meanwhile the People’s Bank of China last raised the benchmark <\/span>interest rate<\/a> 25bps to 6.56% in early July last year.  <\/span><\/p>\n

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China reported annual inflation of 3.4% in April, down from a high of 6.5% in July last year.  Meanwhile the Chinese economy grew an annual 8.1% in the March quarter (8.9% in Q4, 9.1% in Q3, 9.5% in Q2).  The Chinese Yuan (CNY) has appreciated by about 3% against the US dollar over the past year, with the USDCNY exchange rate last trading around 6.31.<\/div>\n
www.CentralBankNews.info<\/a><\/div>\n
\"\"<\/div><\/p>\n","protected":false},"excerpt":{"rendered":"

By Central Bank News The People’s Bank of China (PBOC) announced a 50 basis point cut in the required reserve ratios (RRR) for deposit taking financial institutions, effective 18 May 2012.  The new required reserve ratios will average 20.00% for large banks, and 18.00% for small banks.  The move is expected to add as much as 400 billion yuan … <\/p>\n

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