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Here's a translation of the statement from the PBoC announcing the start of the monetarist policy that created the current round of global asset price instability: 2. What are the main considerations for the central bank to replace the medium-term lending facilities through RRR cuts? A: The main purpose of this RRR reduction is to optimize the liquidity structure and enhance the financial ability of financial services. Currently, with the increase in credit supply, the medium and long-term liquidity demand of financial institutions is also growing. At this time, appropriately reducing the statutory deposit reserve ratio and replacing some central bank borrowing funds can further increase the stability of the banking system funds, optimize the liquidity structure of
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Here's a translation of the statement from the PBoC announcing the start of the monetarist policy that created the current round of global asset price instability: 2. What are the main considerations for the central bank to replace the medium-term lending facilities through RRR cuts? A: The main purpose of this RRR reduction is to optimize the liquidity structure and enhance the financial ability of financial services. Currently, with the increase in credit supply, the medium and long-term liquidity demand of financial institutions is also growing. At this time, appropriately reducing the statutory deposit reserve ratio and replacing some central bank borrowing funds can further increase the stability of the banking system funds, optimize the liquidity structure of
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Mike Norman considers the following as important:
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Here's a translation of the statement from the PBoC announcing the start of the monetarist policy that created the current round of global asset price instability:
2. What are the main considerations for the central bank to replace the medium-term lending facilities through RRR cuts?
A: The main purpose of this RRR reduction is to optimize the liquidity structure and enhance the financial ability of financial services. Currently, with the increase in credit supply, the medium and long-term liquidity demand of financial institutions is also growing. At this time, appropriately reducing the statutory deposit reserve ratio and replacing some central bank borrowing funds can further increase the stability of the banking system funds, optimize the liquidity structure of commercial banks and financial markets, reduce the bank capital costs, and thus reduce corporate financing costs. At the same time, the release of about 750 billion yuan of incremental funds can increase the financial institutions' support for small and micro enterprises, private enterprises and innovative enterprises, promote the vitality and resilience of economic innovation, enhance the growth of endogenous economic growth, and promote the healthy development of the real economy. .
They, in monetarist fashion, created an additional 750B yuan of reserve assets at the depositories to "lend out"...
People's Bank of China
Statement from Monetary Policy Division