The PBoC said that that the cut is for banks to repay MLF loans and will release about 400BN yuan of liquidity net (excluding the MLF repayment). According to preliminary calculations, this targeted easing move is similar to what the PBOC did back in September 2017, when China cut the RRR by at least 50 bps; it marked the first RRR cut since February 2016. https://www.zerohedge.com/news/2018-04-17/china-cuts-rrr-1-release-liquidity
China Bails Out Flagging Stock Market As Bonds Stage Enormous Rally After RRR Cut Wednesday’s rally is an important signal that the national team may have entered the market. The national team is likely to defend the Shanghai Composite at 3,000. They need to hit the brake to prevent the selloff from accelerating. That’s from Central China Securities’ Zhang Gang, a Shanghai-based strategist who spoke to Bloomberg today for a piece on Chinese equities, which rallied on the session following the PBoC’s Tuesday RRR cut. https://heisenbergreport.com/2018/0...-as-bonds-stage-enormous-rally-after-rrr-cut/