The People’s Bank of China may soon need to move away from using the reserve requirement ratio as a tool to spur liquidity and growth in the economy since it’s already at relatively low levels and is becoming less effective in addressing the structural challenges facing the economy. That’s the view from several economists, who say China’s central bank will likely adjust the RRR — or the amount of cash banks must hold in reserves — more sparingly in future as it transitions to relying on other instruments, such as medium-term loans and lending targeted to specific sectors. Even though speculation is growing the PBOC ... (full story)