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MNI POLICY: China RRR Cuts Create Strong Money Expansion: PBOC

By Archie Zhang
     BEIJING (MNI) - The People's Bank of China (PBOC) said its measures to
lower banks' required reserve ratios since 2018 freed up funds previously locked
up and resulted in strong money expansion, even as the cuts seemingly shrank its
balance sheet.
     PBOC's reduced balance sheet differed from the scenarios faced by central
banks of developed economies, such as that by the Federal Reserve, when they
sold bonds and created tightening, PBOC said in a statement on its WeChat
account on Monday.  
     PBOC has unlocked CNY8 trillion long-term funds since the beginning of 2018
by cutting RRRs 520 bps to the average of 9.4% on May 15 and the ratio cuts
supported the development of the real economy, according to the statement.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: MMQPB$,M$A$$$,M$Q$$$,MI$$$$,MT$$$$]

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