China to step up monetary easing to support the economy

China will step up monetary policy easing and keep liquidity “reasonably ample”, the state cabinet said in a meeting chaired by premier Li Keqiang on Wednesday, as it looks to support the economy and help small and medium-sized firms.

The cabinet indicated the Chinese government will keep liquidity ample through cutting the required reserved ratio (RRR) – the amount of cash banks are required hold – and re-lending, while guiding market interest rates lower, state broadcaster CCTV reported.

The government will ensure that China’s issuance of new yuan-denominated loans and total social financing in 2020 exceed the amount last year, the report added.