by Lost_in_Adeles_Rolls
#BREAKING#PBOC ANNOUNCED 0.5% TARGETED CUT IN #RRR RESERVE REQUIREMENT RATIO, WITH EFFECT FROM JULY 5 t.co/BAP0B6byfe
— YUAN TALKS (@YuanTalks) June 24, 2018
#PBOC:
The #RRR cut will release 500bn yuan for big five state banks and 12 national joint-stock banks, who are encouraged to use the money to conduct debt-for-equity swaps and release 200bn yuan for mid and small banks to increase lending to small and micro businesses. t.co/3mei8ya5e5— YUAN TALKS (@YuanTalks) June 24, 2018
Looks like the PBOC is trying to juice up the economy over there given the recent turmoil. View this as you want but central banks don’t do this when things are going well.
In this case, the PBOC is recommending that the freed up capital be used to shore up debt for SMB or micro sized companies.
The fact that they are doing this indicates stress. Not the first time this has happened this year.
Also, since most people here will probably misinterpret this – this isn’t really a product of tariffs or trade war issues. This is more a product of the debt buildup in China, as well as a product of the Yuan dropping.
Warning: Zerohedge
They have some crazy stuff but I like their take on financial issues since they usually provide some good sources.Take on China’s reserve req increase w/ backup data/charts