Deciphering the RRR Cut
Jan 16, 2020
3 minutes
By Lan Xinzhen
Copyedited by Sudeshna Sarkar
When the People’s Bank of China (PBC), China’s central bank, cut commercial banks’ reserve requirement ratio (RRR) by 0.5 percentage point on January 6, a move expected to unleash 800 billion yuan ($115 billion) in the market, many read it as a sign of China relaxing its monetary policy. The central bank’s efforts were seen as an attempt to stabilize the economy amid the economic slowdown.
However, given China’s current economic picture, the reading
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