Coming from Behind - China's RRR Move

China's move on reducing the Reserve Requirement Ratio for Banks right after regulating stocks trading have been interpreted as a real sign of the government addressing a foreseeable single digit economic growth for China. This would free up much liquidity for banks to lend to stimulate the economy which came from behind the two previous rate cuts made last year.

The announcement made have calmed expectations and nervous investors of a probable opening decline across Asia due to the US stocks moving triple digit last Friday. China and Japan have eased as of this writing and will be waiting for the next two trading session for the day towards the US market. Although, some US analyst have seen this move by China as a desperation to combat a high probability of a slowdown for the year. 

The timing could not have gone better as China's main move in pursuing and strengthening its stance on the Asia Infrastructure Investment Bank (AIIB) will be their main flagship growth in the financial sector. As the Chinese Yuan becomes part of a basket of currencies to be traded and likewise acceptable worldwide  The Chinese Yuan or better know as the Renminbi indirect challenge to the US Dollar. Its timing in setting the AIIB group of nations have been welcomed by most counties in Asia and Europe that have shown interest and have joined either as co-founding members of the bank's mandate which is in close proximity with the likes of the Asian Development Bank, World Bank, and the International Monetary Fund.

With that said, the viability of the bank's goal is noble which defines specific areas of responsibilities that would provide the necessary funds and assistance to build continuous growth for a developing country. However, with global rates at their lowest including most major  foreign exchange rates weakness, have been seen as a timely executed plan favoring a China led-consortium. With Global trade imbalance and surrounding geopolitical issues there should be a drive to create a new global equilibrium levels that would favor most member countries in this crucial times.