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12 Mar 2014
PBoC ready to cut bank reserves if GDP slows down - Reuters
FXStreet (Bali) - According to an exclusive Reuters report, China central bank would be ready to cut bank reserves if growth falls below 7.5%, sources suggested.
As Reuters notes: "China’s central bank is prepared to take its strongest action since 2012 to loosen monetary policy if economic growth slows further, by cutting the amount of cash that banks must keep as reserves, sources involved in internal policy discussions say."
"A cut would be triggered if growth slips below 7.5 percent and towards 7.0 percent, they said, and would come on top of money market operations and currency intervention via state banks that traders say has already loosened monetary conditions" Reuters added.
As China continues to implement tough financial reform as part of its economic transition, and while a natural process, the market is still worried of any signs that growth in China may slow down below the official 7.5% threshold set by the Chinese government.
As Reuters concludes, "the central bank will be prepared to free up some cash by cutting bank reserves if need be to give the economy support, the sources at top government think-tanks said."
As Reuters notes: "China’s central bank is prepared to take its strongest action since 2012 to loosen monetary policy if economic growth slows further, by cutting the amount of cash that banks must keep as reserves, sources involved in internal policy discussions say."
"A cut would be triggered if growth slips below 7.5 percent and towards 7.0 percent, they said, and would come on top of money market operations and currency intervention via state banks that traders say has already loosened monetary conditions" Reuters added.
As China continues to implement tough financial reform as part of its economic transition, and while a natural process, the market is still worried of any signs that growth in China may slow down below the official 7.5% threshold set by the Chinese government.
As Reuters concludes, "the central bank will be prepared to free up some cash by cutting bank reserves if need be to give the economy support, the sources at top government think-tanks said."