PBOC’s Ma: There is a big room for further RRR cuts

Ma Jun, an external adviser to the People's Bank of China’s (PBOC) monetary policy committee (MPC), said that the central bank has a relatively big room for further Reserve Requirement Ratio (RRR) cuts and targeted RRR cuts.

He added that the PBOC can also ramp up open market operations (OMOs) if necessary.

This comes after the central bank unexpected left the Loan Prime Rate (LPR) rate unchanged this month, as the coronavirus situation improves in the country, with households and businesses returning to normalcy.

Market reaction

Markets are enjoying some signs of risk recovery amid positive Asian stocks, as the global stimulus measures to fight the virus outbreak seem to be playing out.

The rush for safety in the greenback is seen losing steam, as the US dollar index corrects sharply from three-year highs, dragging USD/JPY back below 110.00 alongside.