China provided 500 billion yuan (US$81 billion) of liquidity to the country's five biggest banks as Premier Li Keqiang steps up stimulus to support economic growth, Sina.com reported yesterday.
The People's Bank of China (PBOC) yesterday started providing the banks with 100 billion yuan each through standing lending facilities with durations of three months, the news website said, citing banking analyst Qiu Guanhua at Guotai Junan Securities Co. The PBOC will complete the process today.
"This is like 'printing money,' as base money is created," Shen Jian-guang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd., said in an e-mail. "The immediate impact is similar to an RRR cut of 50 basic points to all banks." RRR is banks' required reserve ratio; cutting it increases the amount they have available to lend.
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