PBOC seen cutting reserve requirement

Taipei

CHINA could cut reserve requirement ratios as early as this weekend to spur economic growth and boost cash supply to counter a surge in municipal bond sales.

The People's Bank of China (PBOC) may lower the amount that banks must set aside as reserves by as much as 100 basis points this weekend to 17.5 per cent, according to China Merchants Bank Co analyst Liu Dongliang. That would be the third reduction this year. HSBC Holdings plc predicts a 50-basis-point cut in the "coming weeks", while Societe Generale AG said that one more is needed before the end of June.