After posting the daily analysis, the PBOC announced a 25 bp cut in required reserves. This is said to free up around CNY530 bln or around $83 bln. It may help explain the failure to cut the benchmark Medium-Term Lending Facility. Some rural banks may see a 50 bp cut in reserve requirements.
It seems like it is too small of move to satisfy expectation or address the growing economic challenges. More monetary and fiscal stimulus will be necessary to help offset the economic crunch from the Covid-lockdowns and disruptions. The dollar firmed slightly against the offshore yuan (CNH) but remains softer on the day.
Disclaimer
PBOC Trims Reserve Requirements: Delivers Wet Noodle after Earlier Disappointment
Reviewed by Marc Chandler
on
April 15, 2022
Rating:
Reviewed by Marc Chandler
on
April 15, 2022
Rating:
