The People's Bank of China cut the reserve requirement ratio for banks by 25 basis points on Friday for the first time this year to support the nascent economic recovery and to ensure reasonable and sufficient liquidity in the banking system.
The RRR represents the amount of cash that banks must hold as reserves. The latest reduction in the ratio is applicable to all banks except those that have already implemented a 5 percent reserve ratio, the central bank said in a statement. The new ratio is effective March 27. The average deposit reserve ratio of financial institutions after the latest cut is about 7.6 percent. The previous change in the RRR was a quarter-point cut for all banks in December. The reduction was the fifth in this policy cycle. The PBoC said the latest reduction would help to maintain appropriate money supply and credit at a stable pace that would to match the nominal economic growth rate.
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June 19, 2026 16:46 ET Major central banks continued to dominate the economic news flow this week too, led by the Federal Reserve, as they announced their latest policy decisions. The Federal Reserve policy session was in focus as it was the first to be led by the new chief Kevin Warsh. In Europe, central banks of the U.K. and Switzerland announced their rate decisions. In Asia, the Bank of Japan drew attention for its policy moves, while data out of China threw some light on the state of the economy.