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MNI: PBOC Set To Cut RRR As Covid Hits, Yields Spike

MNI (Singapore)
(MNI) Beijing

A reserve requirement ratio cut could come as soon as Friday, freeing up CNY500 billion to CNY1 trillion of liquidity.

True

The People’s Bank of China is expected to cut banks’ reserve requirement ratio in coming days as fresh Covid outbreaks fuel concerns about the sluggish economic recovery, helping soothe the bond market that has seen yields spike on fears of tightening liquidity, advisers and analysts told MNI.

The State Council unexpectedly announced on Wednesday that RRR cuts should be deployed at a “timely and appropriate” pace to retain “reasonable and ample” liquidity.The PBOC is expected to follow the order promptly. MNI recently reported a RRR cut was likely. (See MNI PBOC WATCH: Targeted Easing To Boost Credit, RRR Cut Seen)

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The People’s Bank of China is expected to cut banks’ reserve requirement ratio in coming days as fresh Covid outbreaks fuel concerns about the sluggish economic recovery, helping soothe the bond market that has seen yields spike on fears of tightening liquidity, advisers and analysts told MNI.

The State Council unexpectedly announced on Wednesday that RRR cuts should be deployed at a “timely and appropriate” pace to retain “reasonable and ample” liquidity.The PBOC is expected to follow the order promptly. MNI recently reported a RRR cut was likely. (See MNI PBOC WATCH: Targeted Easing To Boost Credit, RRR Cut Seen)

Keep reading...Show less