June 25, 2018 / 1:51 AM / a year ago

China stocks open higher after reserve ratio cut; yuan falls

SHANGHAI, June 25 (Reuters) - China’s share markets opened higher on Monday after a decision by the country’s central bank to cut banks’ reserve requirement ratios (RRR), while the yuan and bond prices fell.

The CSI300 index and Shanghai Composite Index were both up about 0.5 percent in early trade.

China’s yuan currency fell to a 5-1/2-month low against the U.S. dollar on Monday, trading around 6.52 per dollar, effectively wiping out all the gains it made so far this year.

The price of 10-year treasury futures for September delivery , the most-traded contract, fell 0.3 percent in early morning trade to 95.285.

The People’s Bank of China (PBOC) said late on Sunday that it would cut the amount of cash that some banks must hold as reserves by 50 basis points (bps), releasing $108 billion in liquidity, to accelerate the pace of debt-for-equity swaps and spur lending to smaller firms.

Last week, China stocks posted their worst weekly loss in nearly five months, hit by concerns of economic slowdown, tighter liquidity, and a potential full-blown trade war between China and the United States. (Reporting by John Ruwitch and Shanghai newsroom Editing by Jacqueline Wong)

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