The People’s Bank of China (PBOC) announced on Friday that it will cut the reserve requirement ratio (RRR) for all banks by 25 basis points (bps) effective from April 25.

The PBOC further noted that it will cut RRR by an additional 25 bps for some smaller banks and noted that it will release about 530 billion yuan in long-term liquidity with this decision.

Additional takeaways 

“Will keep prudent monetary policy.”

“Will not resort to flood-like stimulus, will keep liquidity reasonably ample.”

“Weighted average RRR for financial institutions at 8.1% after the new cut.”

“Will guide financial institutions to use funds released to support industries and small firms affected by COVID.”

“Will closely watch changes in inflation, keep prices stable.”

“Will closely watch monetary policy adjustments by major economies.”

This article was originally published by Fxstreet.com.Read the original article here.

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