CHINA CUTS BANKS’ RESERVE REQUIREMENT RATIO

Images Of Chinese Yuan Banknotes

BEIJING (Alliance News) – China’s central bank on Monday evening cut the ratio of their cash that banks must keep in reserve, in an attempt to counter slowing growth.

The reserve requirement ratio will drop by 0.5 percentage points effective March 1, the People’s Bank of China said on its website Monday.

The reduction allows banks to lend more, which can inject more money into the economy.

China’s economy grew 6.9% in 2015, the slowest growth in more than a quarter of a century.

The growth missed the 7% target that the government had set for the year and is the weakest since 1990.

The central bank lowered the reserve requirement ratio four times last year, the first time in February 2015 and the most recent in October. The latest drop was expected by analysts this month.

The new ratio will give most major lending institutions a reserve requirement ratio of 17%.

Copyright dpa

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