The People's Bank of China announced a RRR cut to save the economy.
(Reuters)
[Financial Channel/Comprehensive Report] The People’s Bank of China (PBOC) announced today (25th) evening that it will lower the deposit reserve ratio of financial institutions by 0.25 percentage points starting from December 5th. billion yuan (approximately NT$2.15 trillion) in long-term funds.
The People's Bank of China announced that in order to maintain a reasonable and sufficient liquidity and promote a steady decline in comprehensive financing costs, it will lower the deposit reserve ratio of financial institutions by 0.25 percentage points from December 5.
According to the People's Bank of China, the RRR cut is comprehensive and will release RMB 500 billion in long-term funds.
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The People's Bank of China emphasized that the RRR cut can optimize the capital structure of financial institutions, increase the long-term stable funding sources of financial institutions, enhance the capital allocation capabilities of financial institutions, support industries and small and medium-sized enterprises severely affected by the epidemic, and reduce the capital cost of financial institutions by about 5.6 billion yuan per year. .
The last time the People's Bank of China lowered the reserve ratio was in April, when Shanghai was closed due to the epidemic, and the reserve ratio was lowered by 0.25 percentage points.
The RRR cut is still due to the spread of the epidemic, the downturn in the housing market, and economic pressure.
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