PBOC slashes reserve ratio once more as China faces bleaker end to the year

(Oct 8): China’s central bank cut the amount of cash lenders must hold as reserves for the fourth time this year, as policy makers seek to shore up the faltering domestic economy amid a worsening trade war.

The People’s Bank of China lowered the required reserve ratio for some lenders by 1 percentage point, effective from Oct 15, according to a statement on its website Sunday. The cut will release a total of 1.2 trillion yuan ($241 billion), of which 450 billion yuan is to be used to repay existing medium-term funding facilities which are maturing, the central bank said.

The central bank has shifted to looser monetary policies this year as the combined effects of Beijing’s financial clean up and the trade conflict with the US threatened the economic expansion. As there’s now every sign that the Trump administration intends to continue pressing Beijing on trade and other fronts, China is faced with a more urgent need to support the domestic economy, even if that may increase downward pressure on the currency.

---

Related Stories

• Trump's tariffs hurt more than just China
• China keeps policy loan rate unchanged for second month
• Chinese stocks rebound as PBOC reinforces support for market

---