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PBOC May Cut RRR before Spring Festival: Official Media Cites Industry Insiders
The People's Bank of China (PBOC) hedged the maturity of medium-term lending facility (MLF) with RMB959.5 billion reverse repo yesterday, but the funding situation is still und...
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PBOC May Cut RRR before Spring Festival: Official Media Cites Industry Insiders
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The People's Bank of China (PBOC) hedged the maturity of medium-term lending facility (MLF) with RMB959.5 billion reverse repo yesterday, but the funding situation is still under tremendous pressure, according to Shanghai Securities News.

The weighted average quotes of DR001 and DR007, which reflect the price of funds in the interbank market, remained high due to multiple factors, such as the tax period, the demand for cash from mainland residents and the issuance of local bonds, data showed.

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Considering the liquidity gap at the beginning of the year and seasonal factors before the Spring Festival, the PBOC may take measures such as reducing the reserve requirement ratio (RRR) in the near future in order to alleviate the pressure on funding, report quoted industry analysts as saying.

Analysts believed that the PBOC may cut RRR before the Spring Festival to cope with the larger liquidity gap at the beginning of the year.

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