Reserve Requirement Ratios Cut to Support Smaller Companies
The Chinese central bank has released details about the reserve requirement ratios that was cut by the State Council during the end of May in order to support smaller companies along with the nation’s agricultural industry.
Several bank reserve ratios have fallen by 0.5 percentage points starting June 16, and the reduction applies to about two thirds of the city’s commercial banks, 80 percent of non county level rural commercial banks and 90 per cent of non county level rural cooperative banks. The announcement came just after the State Council stated that the May 30 policymakers have appropriately lowered the reserve requirement for banks that extended a certain amount of loans to several rural borrowers and smaller companies. Regional authorities were called upon to help in the stabilization to further ensure that the government will meet its goal of 7.4 percent growth for 2014.
Government data have shown growth in factory production which unexpectedly slowed down in April from the previous year to 8.7 percent along with fixed asset investment that excluded rural households that increased by 17.3 percent for the first four months which is the weakest point for the period since 2001. Meanwhile the second largest economy in the world have expanded 7.4 percent during the period from January to March compared to a year earlier which experts say the weakest pace in six quarters.