China is set to unleash cash into its stock market by lowering the mandatory reserve ratio for securities firms from the current 16% to a level closer to 13% starting in October.

According to China’s state-run Xinhua news agency, the China Securities Registry and Settlement Corporation recently announced that it “decided to lower the minimum reserve requirement in order to improve the efficiency of the market’s use of funds and the level of reserve management.”

Since 2019, the CSRC has lowered the reserve requirement several times.

Originally set at 20%, the reserve ratio was lowered by 2 percentage points in December 2019 and March 2022, to the current 16%.

“Reducing the reserve requirement is similar to the central bank lowering the statutory reserve requirement ratio, which will release liquidity into the market,” Chen Lei, chief economist at Chuanqai Securities, told China’s state-run CCTV.

Industry experts expect the reserve requirement ratio cut to release 30 billion yuan to 40 billion yuan, or 5.5 trillion yuan to 7.3 trillion yuan, 먹튀검증 in the stock market, Xinhua reported.