PBOC cuts share of deposits banks must set aside to boost support for small businesses and ailing state firms
China’s central bank said on Sunday it would unlock at least US$100 billion for the country’s lenders to bail out troubled state firms and to help small businesses, as Beijing tries to shore up growth under the shadow of a trade war with the United States.
The People’s Bank of China (PBOC) said in a statement that it would cut the reserve requirement ratio (RRR), the share of deposits lenders must put aside with the PBOC, for commercial banks by half a percentage point from July 5.
The cut would free up 500 billion yuan (US$76.86 billion) in funds for the big banks, including Industrial and Commercial Bank of China and China Construction Bank, to finance debt-to-equity swaps, a measure often used for troubled state enterprises.
