Lowering of reserve ratio for banks eases burden on growth enterprises

CHINA'S CENTRAL BANK ANNOUNCED on Sunday it would lower the required reserve ratio (RRR) for financial institutions by 1 percent as of Monday, with an additional 1 percent cut for rural credit unions and village banks that mainly serve rural residents and rural development. Comments:

The People's Bank of China has lowered interest rates twice and the RRR once, but they hardly make it easier for enterprises to raise funds, because the RRR remains too high; some analysts have found that the high RRR means the cost of credit was as high as 6 percent for industrial enterprises, higher than their average profit rate. It is urgent that some effective measures are taken to lower the cost of credit for enterprises and lowering the RRR is the best one.

Southern Metropolis Daily, April 20