China’s central bank cuts reserve ratio, injects liquidity

Effective as of today, China’s central bank, the People’s Bank of China (PBOC), cut its reserve requirement ratio for banks by 50 basis points to 17% for certain lenders to boost the economy, according to media reports. On Monday, the PBOC also injected about $100 billion worth of long-term cash into the market in order to offset the effects of industrial bankruptcies and job layoffs due to weak demand and high service costs.

Meanwhile, China’s official manufacturing purchasing managers’ index (PMI) reportedly fell more than expected in February owing to seasonal effects stemming from the week-long Chinese New Year holidays. Some economists commented that the Chinese economy still needs policy support.