Please try another search
© Reuters. FILE PHOTO: Headquarters of the People's Bank of China (PBOC), the central bank, is pictured in Beijing, China September 28, 2018. REUTERS/Jason Lee/File Photo
SHANGHAI (Reuters) - China's central bank made a "timely" move by pumping liquidity into the banking system to respond to rising pressures in the domestic banking industry and growing risks abroad, a state-owned Chinese newspaper said on Saturday.
The central bank on Friday reduced the amount of cash banks must hold as reserves for the first time this year to support a nascent recovery in the world's second-biggest economy. The cut in the reserve ratio came earlier than financial markets had anticipated.
The Economic Daily said in a front-page article that the move by the People's Bank of China will ease tension after demand for funds had increased significantly amid the economic recovery. The early release of liquidity will also help prepare for the next stage of demand expansion, it said.
"Currently the risks in the overseas banking industry are increasing and the external environment is becoming more and more complicated," the newspaper said.
"With the domestic banking industry's debt repayment costs under pressure and the net interest margin continuing to narrow to historical lows, the central bank made a timely move to lower the reserve requirement ratio to release long-term liquidity to the financial system," it said.
The Global Times, a state-controlled tabloid, cited experts as saying the cut reflected the Chinese government's "responsibility to the world" in not following the U.S. in raising interest rates but sticking to an independent monetary policy.
China's leaders have pledged to step up support for the economy, which is gradually rebounding from a pandemic-induced slump after COVID-19 curbs were abruptly lifted in December.
Global markets this week have been hit by the collapse of U.S. lenders Silicon Valley Bank and Signature Bank (NASDAQ:SBNY) and uncertainty over Credit Suisse Group AG, which tapped $54 billion in central bank funding.
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.