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China will cut reserve ratios in timely way -state media quotes premier -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: This giant screen features Chinese Premier Li Keqiang, who is attending a press conference after the conclusion of the National People’s Congress, (NPC), in Beijing, China, March 11, 2021. REUTERS/Tingshu Wang

BEIJING, (Reuters) – China will reduce banks’ reserve requirements ratios (RRR), in a timely manner to safeguard economic stability. State media quoted Premier Li Keqiang on Friday as saying.

China will establish steady economic policies, Li stated via videolink during meeting with Kristalina Georgieva (International Monetary Fund chief).

Li stated that China would maintain its prudent monetary policy and retain sufficient liquidity.

Li announced that China will reduce reserve requirements in China “in a timely manner to step up support to the real economy especially small and medium-sized firms to ensure stable economic operations.”

In July, the reserve ratios were lowered broadly. This is the cash bank must keep as reserves. The central bank defied all market expectations to continue its policy of easing.

China’s economy is facing multiple challenges heading into 2022. These include a downturn in property prices and tight COVID-19 restrictions that have hindered consumption.

The recovery of the economy from last year’s pandemic slump was remarkable, however, it is now struggling with slowing manufacturing and massive debt in real estate markets.

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