The Gist
News and Features
Global Philippines Fine Living
Insights
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
Webinars
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
Downloads
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
DOWNLOAD
investment-ss-3
Economic Updates
Policy rate views: Uncertainty stalls cuts
DOWNLOAD
View all Reports
Metrobank.com.ph Contact Us
Follow us on our platforms.

How may we help you?

TOP SEARCHES
  • Where to put my investments
  • Reports about the pandemic and economy
  • Metrobank
  • Webinars
  • Economy
TRENDING ARTICLES
  • Investing for Beginners: Following your PATH
  • On government debt thresholds: How much is too much?
  • Philippines Stock Market Outlook for 2022
  • No Relief from Deficit Spending Yet

Login

Access Exclusive Content
Login to Wealth Manager
Visit us at metrobank.com.ph Contact Us
Access Exclusive Content Login to Wealth Manager
Search
The Gist
News and Features
Global Philippines Fine Living
Insights
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
Webinars
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
Downloads
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
May 29, 2025 DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
May 8, 2025 DOWNLOAD
investment-ss-3
Economic Updates
Policy rate views: Uncertainty stalls cuts
May 8, 2025 DOWNLOAD
View all Reports
Economy 4 MIN READ

China cuts reserve requirements for banks as economy slows

April 18, 2022By Reuters
Related Articles
Wall Street fear gauge in record retreat after last week's massive spike August 15, 2024 Marcos, son of strongman, triumphs in Philippines presidential election May 10, 2022 Biden 'Summit for Democracy' to rally nations against rising authoritarianism December 9, 2021

BEIJING, April 15 (Reuters) – China said on Friday it would cut the amount of cash that banks must hold as reserves for the first time this year, releasing about 530 billion yuan ($83.25 billion) in long-term liquidity to cushion a sharp slowdown in economic growth.

The People’s Bank of China (PBOC) said on its website it would cut the reserve requirement ratio (RRR) for all banks by 25 basis points (bps), effective from April 25, but analysts said it might not yet be enough to reverse the slowdown.

Heightened global risks from the war in Ukraine and within China widespread COVID-19 lockdowns and a weak property market have triggered convulsions in the world’s second-largest economy that are quickly spilling over into global supply chains.

China’s exports, the last major driver of growth, are also showing signs of fatigue, and some economists say the risks of a recession are rising.

“I don’t think this RRR cut matters that much for the economy at this stage,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, noting it was less than markets had expected.

“The main challenge the economy faces is the Omicron outbreaks and the lockdown policies that restrict mobility. More liquidity may help on the margin, but it doesn’t address the root of the problem,” he said.

The PBOC said the latest RRR cut would boost the long-term funds for banks, enabling them to step up support for industries and firms affected by COVID-19 outbreaks, and lower costs for banks. It will cut financial institutions’ annual funding costs by about 6.5 billion yuan.

The PBOC will also continue to keep liquidity broadly stable, while closely watching inflationary trends and policy changes made by developed countries, it said.

For city commercial banks that do not have cross-provincial business and rural commercial banks that have an RRR of more than 5%, they are entitled to an additional cut of 25 bps.

The weighted average RRR for financial institutions will be lowered to 8.1% after the cut, the central bank said.

Ting Lu, chief China economist at Nomura, expects another 25bp RRR cut before the year-end, most likely before mid-2022, before cutting RRR for some big banks that still have relatively high reserve ratios.

“We expect the PBOC to focus on increasing its direct credit support to small- and medium-sized enterprises, the agricultural sector, green investment, tech and elderly care via the MLF (medium-term lending facility), relending and rediscounting channels,” Lu said.

HEADWINDS

The cut, which follows a broad-based reduction in December, had been widely expected after China’s cabinet said on Wednesday that monetary policy tools should be used in a timely way to bolster growth.

The PBOC has also started cutting interest rates, while local governments have expedited infrastructure spending and the finance ministry has pledged more tax cuts.

China’s economy rebounded strongly from a pandemic-induced slump in 2020 but cooled over the course of 2021 due to persistent property market weakness and strict measures to contain COVID-19 flare-ups, which hurt consumption.

The government’s determination to halt the latest spread of record COVID-19 cases has clogged highways and ports, stranded workers and shut countless factories – disruptions that are ripping through global supply chains for goods ranging from electric vehicles to iPhones. nL2N2WC01E

China’s imports unexpectedly fell in March as the restrictions hampered freight arrivals and weakened domestic demand, while export growth also slowed. Factory and services sector activity both contracted.

The government is targeting economic growth of around 5.5% this year as headwinds build, but some analysts say that may now be hard to achieve without more aggressive stimulus measures.

With other major central banks such as the U.S. Federal Reserve set to aggressively raise interest rates or already doing so, more forceful easing in China could spur potentially destabilising capital outflows as investors shift money to higher yielding assets.

Earlier on Friday, the PBOC kept the rate on its medium-term lending facility unchanged for a third straight month, as expected.

(Additional reporting by Ellen Zhang and Beijing newsroom; Editing by Kim Coghill and Gareth Jones)

This article originally appeared on reuters.com

Read More Articles About:
Worldwide News Philippine News Rates & Bonds Equities Economy Investment Tips Fine Living

You are leaving Metrobank Wealth Insights

Please be aware that the external site policies may differ from our website Terms And Conditions and Privacy Policy. The next site will be opened in a new browser window or tab.

Cancel Proceed
Get in Touch

For inquiries, please call our Metrobank Contact Center at (02) 88-700-700 (domestic toll-free 1-800-1888-5775) or send an e-mail to customercare@metrobank.com.ph

Metrobank is regulated by the Bangko Sentral ng Pilipinas
Website: https://www.bsp.gov.ph

Quick Links
The Gist Webinars Wealth Manager Explainers
Markets
Currencies Rates & Bonds Equities Economy
Wealth
Investment Tips Fine Living Retirement
Portfolio Picks
Bonds Stocks
Others
Contact Us Privacy Statement Terms of Use
© 2025 Metrobank. All rights reserved.

Read this content. Log in or sign up.

​If you are an investor with us, log in first to your Metrobank Wealth Manager account. ​

If you are not yet a client, we can help you by clicking the SIGN UP button. ​

Login Sign Up