RRR cut adds to signs of monetary policy shift

Yesterday’s required reserve ratio (RRR) cut is officially intended to support banks’ debt-to-equity swaps rather than mark a shift away from deleveraging and toward monetary easing. But in practice, the RRR cut does seem likely to result in looser monetary conditions given signs that policymakers are becoming more concerned about the downside risks to economic activity from slowing credit growth.

Subscriber content

Read this in full, free

Start a free trial and use one of your 10 free starter credits to unlock this piece.


Free. 10 articles. No card required.
By completing this form you are agreeing to our Terms and Conditions for the provision of a free trial of Capital Economics' services. We take your privacy seriously and will not share your details with others without your consent. By providing your details, including your email address, you are consenting to Capital Economics sending you macroeconomic commentary and analysis. You can unsubscribe at any time. See our Privacy Policy for more information.

Already a client or trialist? Log in to read this.