The People’s Bank of China (PBC) is scheduled to cut the required reserve ratio (RRR) for financial institutions by 0.25 percentage points (excluding those that have already implemented an RRR of five percent) on December 5, 2022. The weighted average RRR for financial institutions will be 7.8 percent after the cut. The RRR reduction will release total long-term funds of RMB 500 billion ($69.8 billion).
The PBC said this move is to keep liquidity at a reasonable level, to promote the steady decline of overall financing costs, to implement the package of policy measures to stabilize the economy, and consolidate the foundation of the economic recovery.