China’s PBOC hands over 800 billion yuan in profits to central government, state media says

China’s central bank has submitted 800 billion yuan ($119 billion) in profits so far this year to the central government, in a bid to support fiscal spending as the world’s second-largest economy faces downward pressure intense, according to Chinese state media.

The profit transfer was equivalent to the amount of cash released following a 0.4 percentage point cut in banks’ reserve requirement ratio, said Dong Huajie, head of the state treasury office under the People’s Bank of China, during a Monday briefing, according to the state-run China Securities Journal.

In March, the central bank said it would transfer more than 1 trillion yuan in profits to the central government from its vast foreign exchange reserves to help fund fiscal spending this year. The PBOC had earlier said that the submission of funds would be done in a balanced manner on a monthly basis.

Accelerated payments could provide greater support for government budget spending, Dong said during the briefing. He added that the overall profit bid will top 1.1 trillion yuan, which could push M2, China’s broadest measure of money supply, up 0.5 percentage points this year.

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