Nearly three months after the People’s Bank signalled a shift in stance and first cut the required reserve ratio, policy remains tight. Admittedly, benchmark interest rates never climbed back to the levels they were at before the last round of easing kicked off in 2008. But the average lending rate is not far short of the pre-crisis level, because far more loans are now priced above the benchmark. Meanwhile, interbank interest rates are above their mid-2008 levels, as are bill discount rates, a measure of the cost of credit for many smaller firms. With off-balance-sheet lending by banks curtailed over the past year, the rate at which credit is now growing is almost certainly slower than at the tightest point in 2008. In these circumstances, the fact that the People’s Bank has only just announced a second reserve ratio cut underlines that policy loosening is proceeding slowly.