June 19, 2018 / 7:56 AM / a month ago

China cbank says RRR should be appropriately lowered to ease burden on banks

BEIJING, June 19 (Reuters) - China’s central bank said on Tuesday that banks’ reserve requirement ratios (RRR) should be appropriately lowered to ease the burden on the country’s financial institutions.

However, as China is still a developing country, it is still necessary to keep the RRR at relatively high levels, the central bank said in a working paper published on its website.

The People’s Bank of China (PBOC) also said it is urgent to transform China’s monetary policy from a quantity-based mode to a price-based mode, adding that authorities will gradually unify market interest rates, deposit and lending rates.

The PBOC in April unexpectedly cut reserve requirement ratios (RRR) for most banks, in a move that was earlier and more aggressive than expected, highlighting concerns over liquidity and the potential economic drag from a trade war with the United States.

Many analysts expect further RRR cuts in coming months as China’s economic growth starts to cool under pressure from rising borrowing costs and a regulatory crackdown on riskier lending practices.

Reporting by Beijing Monitoring Desk; Editing by Kim Coghill

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below