The central bank of China He said Friday that he was cutting the amount of cash that banks should keep as reserves for the third time this year, releasing a total of 900,000 million yuan (US $ 126,350 million) in liquidity to shore up An economy in slowdown.
The analysts expected that China will announce more measures that imply a easing of its policies soon, since the second largest economy in the world is pressured by the increase in tariffs for U.S before the trade war that faces with that country and the slow domestic demand.
The People's Bank of China (PCB) said it would reduce the reserve requirement ratio (RRR) by 50 basis points (bp) for all banks, with an additional cut of 100 bp for some smaller qualified lenders.
The BPC now has reduced reservation requirements seven times since the beginning of 2018.
The cut, which will release 800,000 million yuan in liquidity, will take effect on September 16. The additional objective cut will release 100,000 million yuan in financing, and will take place in two phases, starting October 15 and November 15.
"The measure shows that policymakers are increasingly concerned, but it is far from sufficient to stabilize the economy," said Larry Hu, chief economist at China in the Macquarie Group in Hong Kong.
“Everything is slowing down: companies are not willing to invest due to the trade war, a global slowdown and the weak growth of infrastructure and real estate, ”he added.
The last move to stimulate bank loans followed a cabinet meeting on September 4 that promised to implement broad and specific cuts in reserve requirements "in a timely manner."
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