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China cuts reserve ratio for banks, again

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It's not a sign of fire, but it's definitely smokey. If the economy was still booming and the loans were being paid without problem, there would be no need to allow the banks to hold less cash reserves.

China's central bank cut the amount of cash that commercial lenders must hold as reserves on Saturday for the second time in nearly three months, the latest step to shore up the slowing economy. The People's Bank of China (PBOC) is on the course of gentle policy easing to cushion the world's second-largest economy against stiff global headwinds, although it has been treading warily. The PBOC delivered a 50-basis-point cut in banks' reserve requirement ratio (RRR), effective from next Friday, February 24, after repeatedly defying market expectations for such a move.

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