PBOC: Will use reserve ratio tool to boost rural support

The People Bank of China (PBOC) is committed to deploying monetary policy tools for boosting rural development, the central bank said in a statement late Thursday,

Key takeaways (via Bloomberg)

“Will provide financial support for rural development with monetary policy tools including the reserve requirement ratio for banks.”

“Will also use lending and rediscounting tools to meet its goals.”

Earlier this week, the central bank Governor Yi Gang vowed to boost credit support to the economy and improve efforts to bring down real lending rates for businesses. 

Separately, China reported a 16.4% rise YoY in its industrial profits for the month of July when compared to +20% prior. YTD, the industrial earnings grew by 57.3%.

Market reaction

The Chinese yuan shrug off the above comments and dismal data, with USD/CNY gaining 0.10% on a daily basis to trade at 6.4868, as of writing.

Resurgent US dollar demand ahead of Fed Chair Jerome Powell’s speech on day two of the Jackson Hole Symposium remains the main driver.