The People's Bank of China said that the reserve requirement ratio (or RRR) is currently at an appropriate level.
The head of the People’s Bank of China’s Sun Guofeng added that there is limited room for further cuts in the reserve requirement ratio (RRR). At the beginning of the month, the bank announced its decision to cut the RRR, which was effective on January 6, injecting around US $114.9 billion into the Chinese banking system. The ratio stood for large banks at 12.5 percent after being at 13 percent before the measure took effect, while it stood at 10.5 percent for small banks, after being at 11 percent.
The purpose of such a measure was encouraging the banks to lend more to Chinese small companies, thus stimulating the Chinese economy, which is currently suffering from sluggish economic growth.
The Bank also said that it will make an adjustment to its cash rates and that the institution should pay more attention to changes in real cash rates, which according to the bank have been falling significantly when discussing whether changing them or not.
China's cash rates currently stand at 4.35 percent and have been kept at the same level by the bank since October 2015.
China is expected to release the official fourth-quarter GDP figures on Friday. On Tuesday, analysts polled by Reuters said that they expect the economy to grow 5.9 percent this year (a 30-year minimum) and 6.1 percent next year, reflecting the current weak economic situation, heavily influenced by the trade war between the United States and the Asian country.
By 11:09 GMT the Chinese Yuan went up by 0.20 percent against the US dollar, hitting the 1.1295 level.
German Industry is Amid a Recession
According to data provided by BDI industry association, the German economy is expected to grow 0.5 percent in 2020 (year-to-year), while the quarterly figure is expected to stand at 0.1 percent.
The association called the German government to launch a massive investment program in infrastructure, as well as for cutting corporate tax rates from 31 percent to 25 percent.
By 11:11 GMT the Euro remained almost steady against the US dollar, gaining 0.06 percent at 1.1158. It went up against the Japanese Yen, gaining 0.14 percent and hitting the 122.7030 level. On the other hand, it lost 0.07 percent against the Swiss Franc, at 1.0739.