China reserve ratio cut to 2007 low to stimulate growth

Reuters

• China's central bank is moving to support the country's slowing economy through a new stimulus package as it continues to escalate with the latest round of tariffs.
• The People 's Bank of China said it' s the way it 's going to be.
• The move is expected to be as much as $ 126 billion for loans, with the first round of reserve cuts taking effect on September 16.
• Visit the Markets Insider homepage for more stories.

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China's central bank is planning to inject a fresh round of stimulus into the country's slowing economy as it grapples with the impact of the latest round of US tariffs.

The People's Bank of China said it is a very important issue in the world.

The PBOC said in a statement on its website on Friday, September 30, 2009, the central bank of the US said the reserve will be lowered to 0.5% on September 16. The central bank also said reserve requirements for some commercial banks will be lowered by 1% starting on October 15 and November 15.

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The package is expected to be as much as $ 126 billion for loans, which could be used to provide credit to smaller firms in an attempt to boost economic growth. This round of stimulus follows an effort in May that injected $ 40 billion into the Chinese economy, and cut $ 112 billion.

"Julian Evans-Pritchard, a senior economist at Capital Economics, said:" The PBOC claims are cut to fair prices.

He continued: "We think the PBOC's other stated goal – to lower borrowing costs for firms – is a more important driver of the move."

China's economy has been slowing down over the past year with the US has continued to ramp up. Industrial output growth fell to a 17-year low in July as it weighed on Chinese producers, and the impact is still expected to intensify with the recent round of US tariffs on another $ 112 billion worth of exports.

"One of the reasons for this is that we are going to have a problem with one another in the future." RRR cut, "Pritchard said in a note to customers on Friday.