News Column

China to Launch 2nd Target DRR Reduction This Yr

June 16, 2014

BEIJING, June 16, SinoCast -- China will reduce renminbi deposit reserve ratio by 0.5 percentage points for commercial banks meeting the prudential operation requirement and lending a certain proportion of loans to agriculture, countryside and farmers and small and micro enterprises, the second target DRR reduction within this year.

The move marks no possibility of comprehensive DRR reduction within a short period, said BoCom chief economist Lian Ping, adding comprehensive DRR reduction can comprehensively add liquidity, but overall liquidity is not in short and the monetary market interest rate is on the low side in recent years, so if conducting comprehensive DRR reduction, part of capital may flow into local government financing platform, real estate and other places that capital should not flow into. Therefore, it is unnecessary for comprehensive DRR reduction in the near future.

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Source: Sinocast Banking & Credit Beat (China)

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