The People’s Bank of China (PBOC) cuts banks’ Reserve Requirement Ratio (RRR) by 25 basis points (bps)

The Chinese central bank said the bank’s Reserve Requirement Ratio cut effective as of December 5.

Weighted average RRR for financial institutions at 7.8% after the new cut.

New RRR cut will release around 500 bln yuan in long-term liquidity.

Will step up implementation of prudent monetary policy.

Will keep liquidity reasonably ample.

Will not resort to flood-like stimulus.

AUD/USD is unable to capitalize on the PBOC RRR cut, as it feels the pull of gravity on the back of a sudden strength in the US Dollar. The Aussie is losing 0.33% on the day to trade at 0.6732, as of writing.

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