17 Jun 2014
China: Targeted RRR cut extended to some larger banks - Nomura
FXStreet (Bali) - Zhiwei Zhang, Economists at Nomura, explains, based on information from the news site Hexun and Wind, that the targeted RRR cut has been extended to some larger banks.
Key Quotes
"According to the Chinese-language financial news sites Hexun and Wind, the previous targeted reserve requirement ratio (RRR) cut to support financing for small- and micro- enterprises has been extended to some larger share-holding banks."
"According to reports, Minsheng Bank and Industrial Bank confirmed that they received notice from the People‟s Bank of China that their RRR has been cut by 50bp. Based on their March deposit data, this will inject around RMB20bn of liquidity. The reports also say that the RRR cut applies to China Merchants Bank as well, which, if true, would imply a further injection of some RMB15bn of liquidity."
"We reiterate our view that policy easing has become a significant macroeconomic factor and we recently raised our 2014 GDP growth forecast to 7.5%. We continue to expect more policy easing measures in the next few months and GDP growth to rebound slightly to 7.5% y-o-y in Q3 and 7.6% in Q4 from 7.4% in Q2 – the consensus view is for growth to slow in H2 2014."
Key Quotes
"According to the Chinese-language financial news sites Hexun and Wind, the previous targeted reserve requirement ratio (RRR) cut to support financing for small- and micro- enterprises has been extended to some larger share-holding banks."
"According to reports, Minsheng Bank and Industrial Bank confirmed that they received notice from the People‟s Bank of China that their RRR has been cut by 50bp. Based on their March deposit data, this will inject around RMB20bn of liquidity. The reports also say that the RRR cut applies to China Merchants Bank as well, which, if true, would imply a further injection of some RMB15bn of liquidity."
"We reiterate our view that policy easing has become a significant macroeconomic factor and we recently raised our 2014 GDP growth forecast to 7.5%. We continue to expect more policy easing measures in the next few months and GDP growth to rebound slightly to 7.5% y-o-y in Q3 and 7.6% in Q4 from 7.4% in Q2 – the consensus view is for growth to slow in H2 2014."