(Beijing Comprehensive News) Under the weak economic recovery, the Central Bank of China announced on Friday (September 15) to reduce the deposit reserve ratio of financial institutions; this is the second reduction in the central bank during the year.Essence
The People's Bank of China issued a announcement on Thursday that in order to consolidate the foundation for the rise of the economy and maintain a reasonable liquidity, it was decided to reduce the deposit reserve ratio of the financial institution 0.25 percentage points (excluding the financial reserve of 5 % deposit reserve ratemechanism).After this reduction, the weighted average deposit reserve rate of financial institutions was about 7.4 %.
According to Bloomberg, after the central bank announced the reduction on Thursday, the offshore RMB briefly touched the low point.
The central bank also emphasized in the announcement that the current economic operation of China has continued to recover, endogenous power continues to increase, and social expectations continue to improve.
China has recently increased its policy support for the economy. In August, it accidentally reduced the interest rate of one -year medium -term lending convenience (MLF) 0.15 percentage points to 2.5%, the largest decline in three years.
The last decline of the People's Bank of China was in March of this year, when it was also reduced by 0.25 percentage points.
The central bank has announced the reduction again this time. It is just that the macroeconomic data of China are weaker than expected. Consumer expenditure and real estate investment have continued to be sluggish, which has dragged down the economic recovery.
Analysis pointed out that the reduction will help reduce the cost of financial institutions and release liquidity to support the development of the real economy. It is expected to boost investor confidence.
