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China to cut bank reserves

China on Wednesday said it would next month cut the amount banks must hold in reserve to boost lending, state media reported.

The decision comes as the world’s second-largest economy faces multiple headwinds, including a prolonged crisis in the property sector, sluggish domestic consumption and weakening foreign demand.

“People’s Bank of China Governor Pan Gongsheng said at a press conference of the State Council Information Office on January 24 that the reserve requirement ratio (RRR) will be lowered by 0.5 percentage points on February 5,” state broadcaster CCTV reported.

The move, the AFP report said would provide “1 trillion yuan ($140 billion) of liquidity to the market”, it added.

China last cut its RRR in September, lowering it by 0.25 percentage points to around 7.4 per cent.

The central bank’s governor also said Wednesday that more policies to offer support for the country’s struggling property sector will be announced tomorrow.

AFP

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