Research Team at Investec, notes that the Peoples’ Bank of China announced a 50bp cut to banks’ reserve requirement ratio (RRR), taking the rate down to 17.0%, and effective from today.
Key Quotes
“The announcement is likely to be seen as a move to support the economy and stabilise growth around the government’s 6.5% goal. It also follows a statement released by the PBoC last week, which saw the language around monetary policy changed, with ‘an easing bias’ added to the prudent policy stance.
The move also came a day ahead of data that showed momentum in the economy remained soft. Three PMIs were released this morning, which were all on the disappointing side, both the official and Caixin manufacturing PMIs fell on the month, whilst the official services PMI also edged back.”
(Market News Provided by FXstreet)