According to CoinEdition: The People’s Bank of China (PBOC) is set to reduce the Reserve Requirement Ratio (RRR) for banks, a strategic move aimed at stimulating the nation's economy. As outlined by the PBOC Governor, Pan Gongsheng, this proposed 0.5 percent cut is expected to increase liquidity in the market by approximately $139 billion (one trillion yuan). The cut adjustment should allow banks to hold less cash in reserve, therefore increasing their capacity to offer loans and spur economic growth.
This RRR cut, scheduled for early February, marks the first in 2024, following two similar reductions implemented by the Chinese central bank in 2023. The move aligns with the central bank's broader considerations towards adopting a more flexible monetary policy to ease the economic slowdown following the COVID pandemic. Despite recording a 2023 economic growth slightly matching analyst expectations at 5.2%, recovery efforts have somewhat dragged.
Meanwhile, the country's stringent ban on crypto trading, imposed in 2021, has seemingly been circumvented by persistent crypto enthusiasts, who continue to trade digital assets covertly. This resilience comes despite governmental sanctions and punitive measures targeting such activities.