BEIJING, China – China has cut the amount banks are required to hold on reserve in an attempt to inject more money into its slowing economy.
The People’s Bank of China said it is reducing the reserve requirement by half a percentage point from Monday to ensure adequate liquidity in the financial system and free up more funds for lending. The rate was last cut on Oct. 23.
China’s economic growth fell last year to a 25-year low of 6.9 per cent, down from 7.3 per cent in 2014. The government is attempting to bring about a gradual shift in policy to allow the market to direct investment and regulate levels of credit, while the central bank has also been guiding China’s currency, the yuan, lower against the dollar to help boost exports.
