Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022.
With interest rates and loan prime rates at low levels, there is more space to cut banks' reserve requirement ratio (RRR) than to cut interest rates, Sheng said.
The central bank lowered the RRR in September for the second time this year to boost liquidity and support economic recovery.
The weighted average RRR for financial institutions was around 7.4% after the cut.
China is prudent in cutting interest rates as its monetary policy needs to consider internal and external balance, Sheng said.
Persons:
Tingshu Wang, Sheng Songcheng, Sheng, Mei Mei Chu, Christopher Cushing
Organizations:
People's Bank of China, REUTERS, Rights, People's Bank of, Shanghai Securities, Thomson
Locations:
Beijing, China, Rights BEIJING, People's Bank of China, U.S