China Delivers Desperately Needed RRR Cut Amid Stock Slide, Liquidity Jitters, Tariff Worries

China Delivers Desperately Needed RRR Cut Amid Stock Slide, Liquidity Jitters, Tariff Worries

Well, everyone knew this was coming, and it's welcome news. China delivered an RRR cut on Sunday of 50bps, a move that will effectively equate to  a liquidity injection of more than $100 billion. Specifically, the PBoC is "encouraging" policy banks to promote debt-to-equity swaps, presumably in an effort to help companies reduce leverage while the cut for smaller banks is aimed at assisting "small and micro enterprises" and alleviating "funding difficulties." The PBoC says using the newly fre
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4 thoughts on “China Delivers Desperately Needed RRR Cut Amid Stock Slide, Liquidity Jitters, Tariff Worries

  1. This move might be successful in bringing more debt to PBOC’s direct control without making that obvious to the public (unlike, say, QE), but the problem of keeping their export pipe flowing remains.

    The PBOC still can’t print USD or stop time. Having totalitarian control of ever-growing yuan debt can at best bring only small comfort as the world economy continues its struggle to evolve and gain traction.

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