PBOC sets loan reserve ratios for small banks
PBOC sets reserve level of 2pc for small players, while the bigger ones still have to deal with 20pc
The People's Bank of China will impose a lower reserve requirement ratio for smaller lenders in an attempt to boost credit to small and medium-sized firms amid the slowing economy.
The PBOC has been implementing a "differentiated reserve requirement ratio", setting a ratio of 20 per cent for the biggest banks, while the requirement for smaller lenders is two percentage points lower, Pan was quoted as saying.
A lower requirement frees up funds for lending.
Meanwhile, the central bank said in its third-quarter monetary policy report yesterday that it would keep monetary policy prudent and money supply reasonable to prioritise its job of supporting economic growth.
The authority will also keep an eye on inflation, which was stable in the third quarter, according to the report.
Also, the central bank will continue to adequately "fine-tune" monetary policy through interest rate cuts and money market operations known as reverse repos that inject liquidity into the banking system.