PBoC steps up support with reserve ratio cuts
Observers point to pressure on monetary base from forex outflows as a motivating factor
The People's Bank of China (PBoC) yesterday (April 19) cut the level of reserves lenders must hold with the central bank by the largest amount since 2008, to cushion the country's growth slowdown.
The cut in overall reserve requirement ratios by one percentage point to 18% follows a 50 basis point cut in February. It comes a week after official figures showed the world's second largest economy grew at an annualised rate of 7% in Q1 – the slowest pace since 2009.
The PBoC cut requirement ratios
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