August 2, 2021

China’s cabinet says it will use RRR cuts to support real economy

People walk along Nanjing Pedestrian Road, a main shopping area, in Shanghai, China May 5, 2021. REUTERS/Aly Song

BEIJING, July 7 (Reuters) – China will use timely cuts in the bank reserve requirement ratio (RRR) to support the real economy, especially small firms, the cabinet said on Wednesday.

The People’s Bank of China (PBOC) has been gradually scaling back pandemic-driven stimulus to curb debt risks, keeping borrowing costs low and telling banks to maintain support for small firms.

China will “use monetary policy tools, including RRR cuts, in a timely way to further step up financial support for the real economy, especially small firms”, the cabinet said in a statement after a regular meeting.

China will lower financing costs for small companies to help them cope with rising commodity prices, the cabinet said.

The country will keep monetary policy stable while increasing policy…

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