tutor2u | China cuts reserve requirement ratio to stimulate credit

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China cuts reserve requirement ratio to stimulate credit

Geoff Riley

2nd March 2016

The Chinese central bank has opted to reduce the reserve requirement ratio by 0.5% in a bid to inject more liquidity into their financial system. This is reported here. The cash to deposits ratio will fall to 17 per cent for larger banks although this is still very high by international standards. Our chart below from Trading Economics tracks the reductions in the cash reserve ratio for big banks since the middle of last year.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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