Trimming requirements: China signals policy easing

China announced that it would trim reserve requirements for banks which lend to the agricultural sector.

SHANGHAI: China has signalled it will further ease monetary policy to kick-start the world’s second largest economy by cutting the amount of funds that some banks must hold in reserve, according to a government statement. The State Council, China’s cabinet, announced after a meeting on Friday that it would trim reserve requirements for banks which lend to the agricultural sector and small enterprises, said the statement posted on the central government website. It gave no details of the timing or sum involved. China launched a similar, targeted reserve cut for banks in rural areas just over a month ago as worries mount that its economy – a key driver of world growth – is slowing more sharply than expected. “Currently, the movement of the economy is stable, but downward pressure is still relatively large,” the State Council said, adding the government would “fine-tune” policy at an appropriate time.

Published in The Express Tribune, June 1^st, 2014.

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