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China makes surprise rate cut to boost liquidity in banking system
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IANS | 17 Mar, 2023
China's central bank has made a surprise cut to the amount of money that
banks must keep in reserve, in an effort to keep money flowing through
the financial system and prop up the economy, media reports said.
The People's Bank of China (PBOC) said it would cut the
reserve requirement ratio (RRR) for almost all banks by 0.25 percentage
points, effective March 27, CNN reported.
"(We must) make a good
combination of macro policies, better serve the real economy, and
maintain reasonable and sufficient liquidity in the banking system," the
PBOC said in a statement.
The late Friday move came as a
surprise and follows a week of turmoil in global financial markets
triggered by the failure of some regional US banks.
As recently
as Wednesday, analysts from Goldman Sachs said they were expecting the
PBOC to keep interest rates and the RRR "unchanged" through the first
half of 2023, CNN reported.
The central bank had already injected
hundreds of billions of yuan into the banking system since January,
mainly through a medium-term lending facility, the analysts said.
The
rapid collapse of the two US banks and troubles at Credit Suisse have
stoked fears about the health of the global banking sector.
Regulators
on both sides of the Atlantic have taken emergency measures since
Sunday to provide liquidity support to troubled lenders and shore up the
confidence in the banking system. On Thursday, a group of America's
largest banks stepped in to rescue First Republic Bank with a $30
billion lifeline, CNN reported.
Earlier this month, Yi Gang,
Governor of the PBOC, hinted at a news conference that monetary policy
this year will be largely stable.
"The current level of real interest rates is relatively appropriate," he said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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