Analysts at TDS suggest that China’s weekend RRR cut was not surprising given slowing in monetary aggregates and forward looking indicators. Key Quotes “China’s cabinet had also strongly hinted at such a move last week. In the event the RRR was cut for large commercial banks by 0.5%, effective July 5, freeing CNY 500bn. RRR cuts for smaller banks are estimated to free up around CNY 200bn.” “Large banks will be directed to use the CNY 500bn for debt to equity swaps while the CNY 200bn will be used for funding small and medium sized enterprises. The moves also come in the wake of further pressure on Chinese equities and ratcheting up of trade tensions.” “The move is line with China’s policy of targeted easing in an attempt to avoid a further build-up of leverage. The fact that some of the liquidity is aimed at debt to equity again highlights China’s peculiar way of deleveraging ie issuing more equity rather than cutting down on debt. Market impact should be limited but it’s worth noting that the CNY CFETS has fallen from two-year highs as China appears to be allowing some relative CNY weakness.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next TRY: Five more years with Erdogan – Nordea Markets FX Street 3 years Analysts at TDS suggest that China's weekend RRR cut was not surprising given slowing in monetary aggregates and forward looking indicators. Key Quotes "China's cabinet had also strongly hinted at such a move last week. In the event the RRR was cut for large commercial banks by 0.5%, effective July 5, freeing CNY 500bn. RRR cuts for smaller banks are estimated to free up around CNY 200bn." "Large banks will be directed to use the CNY 500bn for debt to equity swaps while the CNY 200bn will be used for funding small and medium sized enterprises. The moves also come… Top Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.
