The People’s Bank of China (PBoC) could engage in a further rate cut to the reserve ratio requirement (RRR) in the second half of 2018, according to Chinese media outlets.
The move would follow the PBoC’s rate cut over this past weekend, where the Chinese central bank dropped the RRR for key banking institutions in the Chinese financial system by 50 basis points.
The rate cut over the weekend freed up over $100 billion in liquidity for the Chinese economy, a figure that was much higher than the expected $60 billion figure. The PBoC is making moves to free up liquidity in response to US trade tariffs, as well as an answer to the decline in Chinese equities following the Shanghai Composite’s 11% decline late last week.
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