China Cuts RRR by 25bps

The People's Bank of China has announced a 25 basis point reduction in the reserve requirement ratio (RRR) for all banks, excluding those already complying with a 5% reserve ratio, effective as of September 15th, reflecting policymakers' commitment to maintaining ample liquidity and supporting the post-pandemic economic recovery.

It was the second RRR cut this year, bringing the rate for large banks to 10.5%, and the weighted average reserve requirement ratio for financial institutions to 7.4%.

Beijing has introduced a series of supportive measures to stimulate overall credit demand and stabilize the troubled property sector, but investors have been advocating for additional policy support, as recent data indicated an economic slowdown.

Additionally, the central bank has affirmed its commitment to maintaining the stability of the yuan exchange rate, emphasizing that its prudent monetary policy will be both precise and forceful.