China cuts bank reserve ratio to support economy

BEIJING, Sept 14 (AFP): China's central bank said Thursday it would cut a benchmark ratio for the amount of cash banks must hold in reserve to "consolidate the foundation" of the country's sputtering economic recovery.
The world's second-largest economy has struggled since ditching its isolationist zero-Covid policy late last year, with declining overseas demand and low domestic consumption adding to a slow-motion crisis in the crucial property sector.
The ruling Communist Party has so far refrained from using large-scale stimulus to prop up growth, instead opting for a raft of more targeted measures.
The People's Bank of China (PBOC) said Thursday it would slash the reserve requirement ratio (RRR) by 0.25 per cent to around 7.4 per cent from Friday.
China last cut the RRR in March and this latest move is the third time the central bank has reduced a key rate in the space of a few weeks. The latest RRR cut excludes banks that have already implemented a ratio of five per cent, the PBOC said.
It added that the policy would "consolidate the foundation of economic recovery and maintain reasonable and sufficient liquidity".
"At present, China's economic operations are sustaining their recovery... and social expectations continue to improve," the central bank said.
"We will implement prudent monetary policy accurately and effectively... and push the economy to achieve effective qualitative improvement and reasonable quantitative growth."
China is expected to publish an array of key economic figures on Friday, which analysts forecast will show a modest improvement on previous months.