MONETARY POLICY
China to cut banks’ reserve requirements to boost lending
Beijing — China’s central bank says it will cut the amount of cash that some banks must hold as reserves by 50 basis points to accelerate the pace of debt-for-equity swaps and stimulate lending to smaller businesses. The reserve reduction, the third by the central bank in 2018, had been widely anticipated by investors amid concerns over market liquidity and a potential economic drag from trade disputes with the US. The targeted cut in some banks’ reserve requirement ratios — currently 16% for large banks and 14% for smaller banks — will take effect on July 5, the People’s Bank of China (PBOC) said on Sunday. The central bank said targeted reserve requirement ratios cuts will release about 500-billion yuan ($77bn) for the country’s five large state banks and 12 national joint-stock commercial banks. enders are encouraged to use the money to conduct debt-for-equity swaps, it said. China’s policy makers have been pushing for debt-for-equity swaps since late 2016 to ease pressures from ...
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