China’s central bank has cut the level of funds banks must hold in reserve in an effort to boost growth in the world’s second-largest economy. The reserve requirement ratio has been cut by 0.5 percentage points to 19.5%.
The central bank said it was trying to increase the banking industry’s support for small and rural enterprises, construction of water projects and other activity. Last month, official figures showed China’s economy grew by 7.4% in 2014. That was the slowest rate of growth for 24 years.
The rate cut is the first since May 2012, although there have been cuts for select small lenders. In September, China’s central bank was reported to have injected 500bn Yuan (80bn dollars) into the five biggest state-owned banks over concerns about slowing economic growth. Click here to read more.