China's central bank eases

@CNNMoney May 12, 2012: 12:17 PM ET
peoples-bank-china.gi.top.jpg

NEW YORK (CNNMoney) -- China's central bank took further action Saturday to stimulate its economy.

The People's Bank of China is cutting the amount of money banks are required to hold on the sidelines, freeing up those funds instead to boost investment and growth.

The central bank will lower its reserve requirement ratio for financial institutions by 0.5 percentage points, effective May 18, according to China's official news agency Xinhua.

The move comes as manufacturing in China has contracted recently and growth in industrial production has started to slow in nearly all sectors.

China's trade with foreign countries has also slowed recently, feeling the impact of Europe's woes and the U.S. economy's sluggish growth.

"The move was partly expected given the deterioration in recent Chinese economic indicators," said Societe Generale currency analyst Sebastien Galy.

Overall, economic growth decelerated in the first quarter, and the People's Bank of China wants to prevent that slowdown from persisting.

The central bank has focused on freeing up credit by gradually injecting funds into the money supply and cutting reserve requirements for banks.

The central bank's announcement marks the third cut in the reserve requirement since November. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.20%4.27%
15 yr fixed3.27%3.21%
5/1 ARM3.53%3.38%
30 yr refi4.18%4.24%
15 yr refi3.26%3.20%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
CNNMoney Sponsors
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.