Beijing's reserve ratio cut to boost stocks, lending: analysts

Beijing

CHINA'S central bank move to cut reserve ratios for banks are expected to boost stock markets further and lead to easier loans to companies, analysts said.

As of Monday morning all banks in China have to hold less cash aside as reserves as the government loosens its monetary policy to spur growth and lessen liquidity pressures on the interbank markets.

On Sunday night, the People's Bank of China cut the reserve-requirement ratio (RRR) by 100 basis points for larger banks and even more for some of the smaller banks that lend to small firms and to agriculture.

Though the move came as no surprise for analysts, the scope of the cut - 100 basis points rather than the 50 anticipated, suggests Beijing is shifting to more easing of macro econ…