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A man is riding a tricycle with heavy load on the streets of Shanghai - by Jakub Hałun

A man is riding a tricycle with heavy load on the streets of Shanghai – by Jakub Hałun

Paul Gambles, Managing Director

On Sunday China’s central bank, the People’s Bank of China (PBOC) reduced its reserve-requirement ratio (RRR) by a huge 1% (or 100 base points), a record-equalling cut.

RRR is the percentage of depositors’ balances a bank must retain in cash – the rate is usually set by the central bank. The reduction of this amount is an easing tool, designed to encourage banks to lend more and reduce interest rates.[1]

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