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The People's Bank of China (PBOC) has been
widely expected by analysts to roll out more RRR cuts this year
as the world's second-largest economy sputters amid a trade war
with the United States.
"(We) will use both broad and targeted RRR cuts in a timely
manner as tools to guide financial institutions to guide more
funds into inclusive finance, and ramp up support for the real
economy," state broadcaster CCTV reported, citing the state
council meeting, which was chaired by Premier Li Keqiang.
The last time the PBOC implemented a broad cut for all banks was
in January, when the RRR was lowered by a total of 100 basis
points in two stages, freeing up $116 billion for new lending.
The state council, or cabinet, also stressed the need to ensure
the economy grows at a "reasonable range", state broadcaster
CCTV reported. China aims to achieve GDP growth of between 6%
and 6.5% in 2019.
China will maintain a prudent monetary policy, and fine-tune the
policy in a preemptive way, CCTV said in a report on the
meeting.
The reserve requirement ratio is the share of cash that banks
must hold in reserve, and cutting it unleashes liquidity for
lending. A "broad" cut applies to most or all lenders, while
targeted cuts are applied to certain segments of the banking
sector.
The PBOC has cut the RRR six times since early 2018, with
Beijing urging cautious banks to keep lending to struggling
businesses, especially smaller, private firms that account for
over half of the country's economic growth and most of its jobs.
(Reporting by Cheng Leng, Yawen Chen, and Tony Munroe, editing
by Louise Heavens and Darren Schuettler)
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