PBOC to use multiple monetary tools to support real economy

The State Council, China's cabinet, decided at an executive meeting to lower the reserve requirement ratio (RRR) at an appropriate time.

The RRR refers to the proportion of money that lenders must hold as reserves. China last cut the RRR in December by 0.5 percentage point, sending the weighted average RRR to 8.4 per cent.

Sun Guofeng, head of the PBOC's monetary policy department, said the RRR cut will be part of the central bank's stepped-up efforts to reduce financing costs in the real economy and strengthen financial assistance to sectors hit hard by COVID-19, such as small and micro enterprises and self-employed businesses, official Chinese media reported.

Sun added that the PBOC will also launch two targeted re-lending facilities at an early date to boost technological innovation and inclusive elderly care services.

ALCHEMPro News Desk (DS)