Central Bank of China Over 8 trillion yen supported by SMEs.
The Chinese central bank has announced that it will reduce the reserve ratio of financial institutions and supply more than ¥ 8 trillion to the market in Japanese yen. With the number of new coronavirus infections drastically reduced, it appears that the aim is to help small and medium enterprises, which have been hit by management, raise their cash and encourage them to resume operations.
The deposit reserve ratio represents the ratio of the total amount of deposits held by Chinese financial institutions that must be deposited to the central bank and the People's Bank of China. The People's Bank of China has announced that it will reduce its reserve requirement from this month.
Specifically, the ratio of lending to SMEs and micro enterprises will be reduced by 0.5% to 1% from the previous level depending on certain conditions, and in some cases it will be further reduced by 1% depending on the size of the financial institution. .
This will provide the market with RMB 550 billion and more than ¥ 8.3 trillion in Japanese yen.
In China, the number of new coronavirus infections has dropped sharply compared to before, and the Chinese government wants to resume business activities to prevent the economic downturn. Also remains at around 60%.
The People's Bank of China seems to be aiming to encourage business resumption by helping companies that have been hit by the measures to raise cash.