The Chinese media all said that the Central Bank of China made a “timely” move to inject liquidity (cash) into the banking system.
This is in response to increasing pressure on the domestic banking industry and increasing risks abroad.
According to Reuters news agency, the cut in China’s reserve requirement ratio came earlier than financial markets expected.
Article on the front page of Economic Daily believes that the move of the Central Bank of China will ease the tension caused by a significant increase in the demand for money in the context of the economic recovery. An early increase in liquidity will also prepare the next phase of demand expansion.
“At present, risks in the offshore banking industry are increasing, and the external environment is becoming increasingly complex,” the paper wrote.
Specifically, “domestic banks are under pressure to repay loans while net interest margin continues to fall to the lowest level in history. The central bank has promptly moved to lower the reserve requirement ratio. to release liquidity to the financial system,” the report commented on the decision just made.
Newspaper Global Times According to experts, the reduction of the reserve requirement ratio reflects the “responsibility to the world” of the Chinese government. It also shows that China does not imitate the US in raising interest rates but adheres to an independent monetary policy.
Chinese leaders have all pledged to increase support for the economy that is gradually recovering from the pandemic.