The People’s Bank of China announced today it would cut the deposit reserve ratio of financial institutions by 0.25 percentage points on December 5, 2022.
Citing a report, the reduction is being implemented in an effort “to maintain sufficient liquidity, promote the stable reduction of comprehensive financing costs, implement a package of policies as well as measures to stabilize the economy, and consolidate the foundation of economic recovery.”
Notably, the 0.25 percentage points cut down from the deposit reserve ratio exempts the 5% deposit reserve that has been previously applied. According to the report, after this cutdown, the weighted average deposit reserve ratio of financial institutions would be about 7.8%.
The Endeavor to Improve the Growth of The Economy
So far, China’s economy is still in a short-handed state following the surge of Covid, which has made over one-fifth of China’s total GDP under lockdown. While the impact of this could result in more plummeting in the country’s economic growth, some entities are already disclosing their plans on how to combat it.
Alongside the reduction of the deposit reserve ratio of financial institutions, The people bank of China also stated that it would firmly implement the spirit of the 20th National Congress of the Communist Party of China to strengthen the implementation of prudent monetary policy,
In addition, to focus on supporting the economy, the People’s Bank of China would consider internal and external balance, provide better play to the dual functions of the total amount and structure of monetary policy tools, nurture logical and abundant liquidity, as well as maintain the money supply and social financing.
Speaking of China, the country has appeared to be one of the largest crypto whales with significant control of the crypto market. Reportedly, the Chinese government possesses a greater quantity of Bitcoin than either MicroStrategy or Tesla, Inc.
As reported by Blockchain Reporter, a court verdict once revealed that during the crackdown, a total of 194,775 Bitcoin, 833,083 Ethereum, 1.4 million Litecoin, 487 million Ripple, 6 billion Dogecoin, and 213,724 USDT, as well as other cryptocurrencies, were confiscated by the Chinese authorities.