All eyes on PBOC as US banking woes go global

If Governor Yi Gang’s staff at the People’s Bank of China had been planning a vacation in 2023, it might be time to cancel.

The PBOC’s surprise move on March 27 to lower the reserve requirement ratio (RRR) for financial institutions by 25 basis points is the first official acknowledgment that troubles from Silicon Valley Bank (SVB) to Credit Suisse are a clear and present danger to China’s 5% economic growth target.

What’s more, it signals the start of a wider effort by Beijing to get out the economic sandbags.

Already there are hints that consumption isn’t shooting skyward as fast or as sharply as hoped since President Xi Jinping scrapped “zero Covid” lockdowns. Yet intensifying headwinds from the West is the last thing Yi needs right now.