China Stocks Jump After Bank Reserve Ratios Cut

The central bank’s 50 basis-point cut in bank reserve ratio requirement released about 400 billion yuan ($63.53 bil.) in capital into the economy and sent China’s stocks surging.

On Saturday the People’s Bank of China announced a lowering of the reserve requirement by 50 basis points to 20.5% for large commercial banks and 17% for small and medium banks. The new ratio requirements will take effect on February 24.

On Monday morning the benchmark Shanghai Composite Index jumped 1.12% to 2,383.69 within moment after opening while the Shenzhen Component Index jumped 1.31% to open at 9,741.19.