(Yicai Global) April 24 -- The People's Bank of China says it will not cut the reserve requirement ratio of some rural financial institutions, marking the second time in one month that the central bank has moved to deny such rumors.
Reports emerged yesterday that the PBOC will reduce the RRR for rural commercial banks and rural credit cooperatives by 1 percentage point from April 25. The institution denied the rumor, stating it has no such plans in a statement.
A poster on social media claiming to be a reporter from state-backed Xinhua News Agency said that authorities would lower the RRR by 0.5 percentage point from April 1. PBOC has sent out an official letter calling for the investigation of the rumormonger.
The PBOC will not cut the RRR in the short term, Sheng Songcheng, former director of PBOC's investigation and statistics department, told Yicai Global. The ratio is basically moderate and most economic data improved in the first quarter, he said, adding that money market liquidity is reasonable and abundant now so a cut is not needed.
The central bank last cut the RRR by 0.5 percentage point on Jan. 15 and Jan. 25, releasing CNY1.5 trillion (USD223.1 billion) in liquidity, a PBOC official estimated.
Editor: William Clegg