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China's latest easing move a response to money outflows

BANGKOK -- The People's Bank of China's announcement Feb. 4 that it will further relax monetary policy, after slashing its benchmark interest rates last November, was widely anticipated by economists. The world's second-largest economy has been showing signs of slowing.

     The move by China's central bank to cut the reserve requirement ratio for all banks by half a percentage point for the first time since May 2012 will add liquidity to the financial system, boosting the economy and helping meet cash demand for the Lunar New Year holidays. But this round of easing is seen more as a response to recent money outflows. Its stimulative effect is likely to be limited and more aggressive easing is expected later in the year.

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