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MNI (London)
     BEIJING (MNI) - The People's Bank of China (PBOC) cut selected banks'
reserve requirement ratios Friday, releasing CNY550 billion into the system to
shore up the virus-hit economy. 
     The central bank lowered RRRs by 0.5 to 1 percentage point, the second move
this year, allowing banks to meet their annual assessment criteria for enforcing
inclusive finance policy, expected to release CNY400 billion, according to a
statement on its website. 
     Qualified joint-stock commercial banks will receive another 1 pp cut,
releasing another CNY150 billion, according to the statement. Banks receiving
the cut must lower loan rates "markedly" to expand credit to small and
medium-sized private companies, the PBOC said. 
     All cuts will take effect on March 16, the PBOC said. The central bank is
making its prudential monetary policy more flexible and appropriate, further
prioritizing the restoration of the real economy, to keep liquidity ample while
avoid excessive liquidity, according to the statement.
     The RRR cuts can directly reduce the cost of banks' interest payments by
about CNY8.5 billion each year, thus helping reduce SMEs' borrowing costs, the
PBOC said. 
     The PBOC's announcement today, the first since a 0.5 pp RRR cut on Jan. 6,
was widely expected by the market. It followed easing moves by the U.S. Federal
Reserve and other central banks responding to the global spread of the
coronavirus outbreak.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 (10) 8532 5998; email:
--MNI Beijing Bureau; +86 10 8532 5998; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
[TOPICS: MMQPB$,M$A$$$,M$Q$$$]
MNI London Bureau | +44 203-865-3812 |

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