China's central bank eases

@CNNMoney May 12, 2012: 12:17 PM ET

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 fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
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
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.