PBOC releases new capital through RRR reduction for inclusive funding

The Chinese central bank has injected more money into the market via a targeted reduction in the reserve requirement ratio (RRR) for inclusive financing.

The People's Bank of China on Friday launched a dynamic RRR badessment for inclusive financing, with more financial institutions benefiting from preferential RRR policies.

The PBOC decided earlier this month to relax the valuation rules allowing eligible financial institutions to benefit from a lower RRR in order to encourage inclusive financing.

Financial institutions can deposit less in the central bank as reserve money if they lend a certain amount of their loans to small and micro-enterprises each borrowing less than 10 million RMB (US $ 1.48 million) ).

The dynamic valuation will inject about 250 billion RMB of long-term capital into the market, the central bank said.

Earlier this month, the central bank lowered the RRR as a whole and set up a medium-term loan facility.

About 800 billion RMB of long-term capital has been released through the aforementioned measures.