People's Bank of China Cuts RRR 50 basis points, Moves to Loosening Bias
The People's Bank of China (PBOC) announced a 50 basis point reduction in the required reserve ratios (RRR) for deposit taking financial institutions, effective 24th February 2012. The new required reserve ratios will average 20.50% for large banks, and 18.50% for small banks. The move is expected to add as much as 400 billion yuan of liquidity to the financial system. The move marks a shift in the policy bias to loosening, with the PBOC previously being content to use open market operations to adjust liquidity, in contrast to the higher profile RRR.
Full Story: http://www.centralbanknews.info/2012/02/peoples-bank-of-china-cuts-rrr-50-basis.html