China cuts banks' reserve ratio to aid recovery

Global Courant

BEIJING, CHINA – JUNE 13: A woman walks past the People’s Bank of China (PBOC) building on June 13, 2023 in Beijing, China.

China News Service | China News Service | Getty Images

China’s central bank said on Thursday it would cut the amount of cash that banks must hold as reserves for the second time this year to help keep liquidity ample and support a nascent economic recovery.

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The People’s Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points from Sept. 15.

The move came after the world’s second-biggest economy has struggled after its post-pandemic recovery faltered.

To support the economy, the government has rolled out a series of policy measures in recent months, including steps to spur housing demand.

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