China’s Policy Adviser: PBOC should cut RRR

Dhwani Mehta FXStreet

Yao Jingyuan, a special researcher at the Counselor’s Office of the State Council said on Tuesday, the People’s Bank of China (PBOC) has room to lower the Reserve Requirement Ratio (RRR) and, therefore, should cut the ratio to support the economic growth.

Key quotes

The reserve requirement ratio “can be lowered by 1 percentage point in the fourth quarter.”

“We don’t need to worry about whether releasing more money will push inflation higher because we still have room.”

“Consumer inflation is likely to be 1% for the full year.”

“A 1 percentage-point cut would unleash 1 trillion yuan ($156 billion) of liquidity. Based on on-the-ground investigations, the liquidity condition of companies remains generally quite tight.”

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Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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