PBoC Cuts RRR

The People's Bank of China lowered the reserve requirement ratio (RRR) for most banks by 25 basis points and for smaller banks by 50 basis points on April 15th 2022, effective from April 25th.

The move will release about CNY 530 billion in long-term liquidity to bolster the economy.

Markets were expecting the central bank to cut the RRR after China's cabinet pledge to do so amid risks to growth arising from new covid-19 outbreaks, a weak property market and the war in Ukraine.

The RRR was also lowered for an additional 25bps for some smaller rural and urban commercial banks.

In December, the central bank also lowered the RRR but by a bigger 50bps.