Experts: Further PBOC RRR cuts predicted in January – Global Times

The highly influential Chinese newspaper, Global Times, cited some experts predicting further cuts in China's overall and targeted required reserve ratios (RRRs) as early as this coming weekend.

The experts view further rate cuts, in light of China’s Premier Li Keqiang’s recent comments that multiple measures will be considered to ease financing pressure on small businesses.

Key Quotes:

“Such moves could ease pressure during the upcoming peak season for capital demand in the New Year and Chinese Spring Festival, and keep reducing financing pressure of small businesses so as to boost economic growth.

With a basic tone of stability, China has been taking a more flexible and targeted monetary policy to manage market supply and demand, as well as to offer support for economic growth.

It is expected that RRRs would be further cut in the short term, in a bid to ease the escalating capital demand of businesses and other institutions in the holidays peak season.

It would be a long-term trend for China's monetary policy to be more flexible and targeted against the backdrop of the increasing complex global and domestic capital markets.”

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