The People's Bank of China announced a 50 basis point cut in the reserve requirement ratio (RRR) and a 0.2 percentage point reduction in the 7-day repo rate, aiming to stimulate economic activity. Governor Pan Gongsheng stated that these measures are expected to be implemented soon, with potential for further adjustments by the end of the year.
BEIJING — China will cut the amount of cash banks need to have on hand, known as the reserve requirement ratio or RRR , by 50 basis points, People’s Bank of China Gov. Pan Gongsheng said during a news conference on Tuesday. Pan, who was speaking to reporters alongside two other financial regulator heads, did not indicate exactly when the central bank will ease the policy but said it would be in the near term. Depending on conditions, there may be another cut of 0.25 to 0.
During his first news conference as central bank governor in January, Pan said the PBOC would cut the reserve requirement ratio. Policy announcements are rarely made during such events, and are typically disseminated through online releases and state media. He then told reporters in March, alongside China’s annual parliamentary meeting, that there was room to cut the RRR further, meaning a reduction had been widely expected for months.
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