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RRR cut marks shift in focus, even if not major easing

The People’s Bank (PBOC) has just announced a 50 basis point cut to the required reserve ratio (RRR) for most banks. This is less of a lurch towards monetary easing than it might seem at first glance – it is partly intended to offset tightening elsewhere. But it is nonetheless the clearest sign yet that policy priorities are shifting away from exiting stimulus towards managing structural headwinds.

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