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China signals targeted RRR cut
The government held a regular meeting and decided to cut the targeted reserve requirement ratio (RRR) for small and medium enterprises (SMEs) when necessary, it also didn't rule out other monetary policy tools to help SMEs. We believe that such a cut will come soon. The cost pressures of SMEs mostly comes from high commodity prices, although the Chinese government has already acted to reduce commodity prices using both market-based and administrative measures. Possible impact There are a number of impacts from a possible targeted RRR cut: Weaker CNY against USD as the targeted RRR cut is in contrast to Fed talk of ... (full story)