BEIJING: China’s central bank said on Thursday that it would slash a benchmark ratio for the amount of cash banks must hold in reserve to strengthen the foundation of economic recovery.
The reserve requirement ratio would be cut by 0.25% to around 7.4% from Friday, the People’s Bank of China said in a statement.
It represents the third time the People’s Bank of China has cut a key rate in the space of a few weeks, as the country’s economy continues to struggle following the end of its isolationist zero-Covid policy from late 2022, AFP reported.
The central bank said that currently, China’s economic operations are sustaining their recovery and social expectations continue to improve.
The statement said that the slash excludes banks that have already implemented an reserve requirement ratio of 5%.
It added that the rate slash would strngthen the foundation of economic recovery and maintain sufficient and reasonable liquidity.
The central bank further said that it would implement prudent monetary policy effectively and accurately, and push the economy to achieve reasonable quantitative growth and effective qualitative improvement.
It comes ahead of the expected publication of important economic figures on Friday, which observers forecast will show a modest improvement on previous months.
