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China cuts banks' reserve ratio to bolster lending and a weak economy

Monday, April 20th 2015 - 06:24 UTC
Full article 8 comments
China's economy grew by 7% in the first quarter of the year, a large figure by Western standards, but the lowest for the country since the 2009 financial crisis China's economy grew by 7% in the first quarter of the year, a large figure by Western standards, but the lowest for the country since the 2009 financial crisis

China's central bank is to cut its bank reserve requirement ratio by one percentage point. The People's Bank of China said that the new reserve requirement would take effect from Monday. The aim is to stimulate more lending into the nation's slowing economy.

The move allows banks to lend out more money, with Chinese state media saying the cut will release 1.2 trillion Yuan ($194bn) into the world's second-largest economy.

China's economy grew by 7% in the first quarter of the year, a large figure by Western standards, but the lowest for the country since the financial crisis of 2009.

Last year its growth slowed to its weakest in 24 years, expanding 7.4% in 2014 from 7.7% in 2013.

It meant growth in the nation's economy missed its official annual growth target of 7.5% for the first time in 15 years.

As part of the new measures the Central Bank has also said it will provide various further cuts to reserve requirements for banks providing agricultural financing.

The bank had previously cut its reserve requirement two months ago.

Top Comments

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  • Skip

    Less and less growth from every yuan spent.

    Apr 20th, 2015 - 08:52 am 0
  • ChrisR

    This is EXACTLY what you don't do!

    When the crash comes the banks will not be able to cover their liabilities.

    Will the commie government bail them out?

    Or will there be civil war and rebellion?

    Apr 20th, 2015 - 11:03 am 0
  • yankeeboy

    They've tried through many years and many “stimulants” to revive this dying economy.
    It won't work.
    The model is done.
    They're going to be stuck with a Zombie bankings system that has no assets and there's no enough $ in China to fix it.
    They will have their citizens losing generational (3+) worth of savings.
    At some point their going to have to let the property bubble pop, business and bank fail and see where they are in the end.
    My guess it will end in riots, hunger, murders just like every Commie gov't ends.
    Regional gov't breaking away from the Central Gov't and an out of control Military.
    Let's see.

    Apr 20th, 2015 - 12:47 pm 0
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