The central bank pushed banks to lend heavily early last year as the virus raced through Wuhan and beyond, to make sure businesses did not run out of cash. Worried that the extra money might fan inflation, the central bank later tightened policy. The new rule allows practically all financial institutions to reduce the required percentage of deposits, the so-called reserve requirement ratio, by half a percentage point. The exact ratio varies with the size of the bank, but the average will be 8.9 percent after next Thursday, the central bank said. The central bank encouraged commercial banks to lend more to smaller businesses.

Source: New York Times July 09, 2021 12:45 UTC