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PBOC unleashes fresh capital via RRR cut for inclusive financing

Updated: Jan 25,2019 7:24 PM     Xinhua

BEIJING — China’s central bank has injected more money into the market via a targeted cut of the reserve requirement ratio (RRR) for inclusive financing.

The People’s Bank of China launched a dynamic evaluation of the RRR for inclusive financing on Jan 25, with more financial institutions to enjoy preferential RRR policies.

The PBOC decided earlier this month to ease evaluation rules for qualifying financial institutions to enjoy lower RRR in a move to encourage inclusive financing.

Financial institutions can deposit less in the central bank as reserve money if they lend a certain share of their loans to small and micro firms each borrowing less than 10 million yuan ($1.48 million) from them.

The dynamic evaluation will inject about 250 billion yuan long-term capital into the market, the central bank said.

The central bank earlier this month lowered RRR across the board and conducted medium-term lending facility.

About 800 billion yuan of long-term capital was released by the above measures.