PBOC Seen Cutting RRR On Friday - Herald

The People’s Bank of China is expected to cut the reserve requirement ratio on Friday, after the State Council executive meeting on Wednesday mentioned using RRR cuts in a timely and appropriate manner to maintain reasonable and ample liquidity, 21st Century Business Herald reported. It may only be a 25bp cut given the need to provide space for additional monetary policy moves, the newspaper said. The possible RRR cut comes amid a slower economic recovery, with October retail sales falling and investment decelerating. Inflation will face downward pressure in the next quarter, and the PPI is likely to keep declining over the short to medium term following October’s 1.3% fall, the newspaper said citing Zheng Houcheng, director of Yingda Securities Research Institute. Since 2019, RRR cuts have been signalled by the Premier at the State Council executive meeting or other occasions, and followed by a PBOC announcement at the end of the week, the newspaper noted.