The People’s Bank of China (PBOC) announced on Friday that it cut banks’ Reserve Requirement Ratio (RRR) by 25 basis points (bps), effective from March 27.
Weighted average RRR for financial institutions at around 7.6% after the new cut.
RRR cut will exclude financial institutions that have implemented 5% RRR.
Will not resort to flood-like stimulus.
Will keep liquidity reasonably ample.
Will better supply key areas, weak links.
Will make prudent monetary policy precise and forceful.
Will keep money supply, total social financing basically in line with nominal economic growth.
Will keep total credit appropriate.
AUD/USD is finding support just above the 0.6700 level on the PBOC rate cut announcement. The pair stalled its retreat from 0.6725, now adding 0.80% on the day.
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