Deposit reserve for financial institutions will be lowered

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The central bank decided to cut the deposit reserve of financial institutions on September 16

In order to support the development of real economy and reduce the actual cost of social financing, the People's Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.5 percentage points (excluding financial companies, financial leasing companies and auto financing companies) on September 16, 2019. In addition, in order to promote greater support for small and private enterprises, an additional 1 percentage point reduction in the deposit reserve ratio for urban commercial banks operating only in provincial administrative areas was implemented twice on October 15 and November 15, with each 0.5 percentage point reduction.

The long-term funds released by this reduction are about 900 billion yuan, of which about 800 billion yuan are released by comprehensive reduction and about 100 billion yuan are released by directional reduction.

                                                                                           (Source: China Steel Network)