LIQUIDITY
China to cut bank reserve threshold
The targeted reduction is a ‘structural adjustment’ and is not a shift in monetary policy, the central bank says
Beijing/Shanghai — China’s central bank says it is to reduce the amount of cash that lenders must hold as reserves from 2018, with the size of the cut linked to the flow of funding to parts of the economy where credit is scarce. The targeted measures apply to all major banks, 90% of city commercial banks and 95% of rural commercial lenders, the People’s Bank of China said in a statement on Saturday. Cuts will range from 0.5 percentage point to 1.5 percentage point depending on how much business banks do with small enterprises, agricultural borrowers and start-ups. Foreign banks will also be eligible for the cut should they meet the requirements. Structural adjustment The targeted reduction is a "structural adjustment" and is not a shift in monetary policy, the central bank said in a separate statement. Policy makers, who have kept the benchmark lending rate unchanged for almost two years, also reiterated on Saturday that they aimed for "prudent and neutral" monetary policy. The poli...
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