BEIJING - China's central bank said on Friday it will release about 250 billion yuan ($37 billion) in additional cash to banks, due to changes in assessments for banks' targeted reserve requirement ratio (RRR) reductions announced in 2018.
On Jan. 4, the central bank announced a cut in the amount of cash that banks have to hold as reserves this year. This is freeing up around 800 billion yuan in net liquidity as the People's Bank of China tries to reduce the risk of a sharp economic slowdown.
That total includes the 250 billion yuan stated on Friday, and about 300 billion yuan after banks used most of the 1.5 trillion yuan released via the RRR cut, which took effect on Jan. 15 and Jan. 25, to pay back maturing medium-term lending facility (MLF) loans, the central bank said.
There was also 257.5 billion yuan in funds released by the central bank via targeted medium-term lending facility (TMLF) on Jan. 23, the central bank said.
On Jan. 2, the central bank said it had relaxed conditions on targeted reserve requirement cuts, a move that effectively allowed more banks to enjoy such cuts and lend more to small firms.
The RRR cut unveiled on Jan. 4 was the fifth announced by China in a year.
($1 = 6.7621 Chinese yuan)