Effective tomorrow
That’s your pop in AUD/USD to 0.7850
- The PBOC says they will cut the ratio by an additional 50bps for qualified urban and rural commercial banks
- Will cut RRR by additional 400bps for Chinese agricultural development bank
- Will guide appropriate growth in social financing
- Move is to keep economy stable
Rather than act on interest rates in general the PBOC use the large reserve requirements at their banks. It’s why debt blowups aren’t usually a problem as banks have them more than covered but lowering the ratio is an act of easing by releasing that liquidity. Of course they won’t want to let those ratios drop too much or the market will become concerned that they won’t be able to contain a big banking/debt crisis
