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- Chinese stocks fell despite the fact that Beijing said it would reduce reserve requirements for banks
Chinese stocks fell despite the fact that Beijing said it would reduce reserve requirements for banks
Chinese stocks fell sharply while the yuan fell, despite the fact that Beijing said it would reduce the amount of cash that commercial lenders should postpone, releasing a net 750 billion yuan ($ 108 billion) to the banking system.
The planned reduction in reserve requirements for banks (RRR) will be the fourth reduction this year, as China weakens credit conditions to support business and calms market fluctuations amid a rising trade war with the United States.
Economists had forecast a further reduction in RRR, although the Central Bank does not expect a decline in base interest rates in the near term. Recall rates remain unchanged from October 2015. China has repeatedly stated that it will not resort to massive stimulus.
In the English-language edition of the Global Times, it is noted that China may not be able to overcome this pressure simply by continuing to improve its economic policies.
"In 2008, the Chinese government announced a stimulus package of 4 trillion yuan ($ 578 billion) to combat the effects of the global financial crisis. Now the Chinese economy is under even more severe pressure against the background of escalating trade friction," the publication said.
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