CHINA-ECONOMY: CHINA RELEASES LIQUIDITY INTO MARKET TO HELP ECONOMY
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The Chinese financial magazine reported on April 3, that to help economic recovery China’s central bank cut the amount of cash that banks need to hold in reserve for the third time this year, releasing about 400 billion yuan ($56.4 billion) of liquidity into the financial system. It said the People’s Bank of China (PBOC) -- China's central bank -- announced on its website that the reserve requirement ratio (RRR) for small and midsized lenders, including rural banks, village banks and city banks which only operate in the region where they are registered, will be lowered by 1 percentage point. The adjustment will be implemented in two stages — April 15 and May 15. The PBOC said it will also cut the interest rate it pays on the excess reserves banks hold at the central bank to 0.35% from 0.72% from April 7. This is money lenders voluntarily keep at the PBOC on top of the amounts required for the RRR. The reduction aims to encourage banks to withdraw the funds and lend them out.
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