PBOC to cut reserve requirement for commercial banks as trade tension escalated

The People Bank of China announces on 6 May 2019 that it would cut the reserve requirement ratios (RRR) for about 1,000 rural commercial banks that operate at the county level to 8 per cent from the current 10-11.5 per cent. The regulations are to take effect starting 15 May 2019. 

It is estimated that the cut in RRR would free up to CNY 280 billion ($41.24 billion) in long-term funding, which could be used for loans to small and private companies.

Analysts commented that the RRR reduction is very much expected and it showed that China Central Bank is fully prepared for the case that trade talks with the USA fail.