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MNI (Beijing)
     BEIJING (MNI) - The People's Bank of China (PBOC) may cut required reserve
ratio (RRR) for banks to ease expected tight liquidity in June and July, the
official China Securities Journal said Tuesday in a front-page commentary.
     "It's expected that the PBOC would increase OMO injection and money supply
for banks to smoothly go through inter-quarterly period" when banks face various
regulatory examinations such as macro-prudential assessment and liquidity
coverage ratio requirement at the end of every quarter, said the newspaper.
     "The option of an RRR cut in exchange for other requirements by the PBOC,
such as last time when banks were required to pay back the medium-term lending
facility to the central bank, could be considered," the newspaper said.
     The newspaper said that liquidity condition in June and July may mainly
depend on action by the PBOC, while money supply likely won't experience large
fluctuations and money market rate may be relatively stable.
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: MMQPB$,M$A$$$,M$Q$$$]

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