The People’s Bank of China (PBC), China’s central bank, has announced targeted required reserve ratio (RRR) cuts effective as of March 16, lowering the RRR for banks that satisfy criteria for lending more to smaller businesses by 0.5 to 1.0 percentage point, aiming to shore up the real economy and lower the actual costs of financing. In addition, eligible joint-stock commercial banks will enjoy an additional targeted RRR cut of 1.0 percentage point for giving more credit to non-financial sectors. The cuts in question will release RMB 550 billion ($78.6 billion) of long-term funds into the economy.
The move will bolster sentiment in the steel market and boost demand for steel.