China Cuts Reserve Ratio for Rural Banks


The People's Bank of China decided to cut the reserve requirement ratio by 2 percentage points for rural commercial banks and by 0.5 percentage point for rural credit cooperatives, aiming to stimulate growth in some parts of the country. The cut will be effective from April 25th, 2014.

The move intends to promote greater support for agriculture, as rural banks will have more cash available for lending. However, the central bank said the reserve cut will not affect the overall liquidity of the banking system.

The Government had first announced the cut last week but no details were given. The last time the central bank cut the reserve requirement ratio for the banking sector as a whole was in May of 2012, when it trimmed the ratio by 50 bps to 20 percent for most large banks.

China Cuts Reserve Ratio for Rural Banks


Joana Taborda | joana.taborda@tradingeconomics.com
4/22/2014 9:42:56 AM