'Time ripe' to cut banks' reserve ratio

The time is ripe for China to cut banks' reserve requirements as slowing inflation gives more room for easing to stabilize growth, said China Securities Journal.

A "timely" reduction by an "appropriate magnitude" can release liquidity and spur lending, the newspaper, published by Xinhua News Agency, said in a front-page commentary on Tuesday. The ratio stands at 20 percent for large banks, a relatively high level, the newspaper said.

A cut in the amount of cash banks must keep as reserves would be the fourth such reduction since November and follow the first lowering of interest rates since 2008.

Agencies - China Daily