A pedestrian walks past the People's Bank of China headquarters in Beijing, China, on Monday, Feb. 26, 2018. Giulia Marchi | Bloomberg | Getty Images China's central bank said on Friday it was cutting the ratio of cash that banks must hold as reserves by 100 basis points (bps), or 1 percent, as it looks to reduce the risk of a sharper slowdown in the world's second-biggest economy. The cut in banks' reserve requirement ratios (RRR) is the first in 2019 and the fifth in a year by the People's Bank of China (PBOC) as the economy faces its weakest growth since the global financial crisis and mounting pressure from U.S. tariffs. The reduction is being made in two equal stages, effective Jan. 15 and Jan. 25, the PBOC said. The reserve requirement ratios (RRRs) are currently 14.5 percent for large banks and 12.5 percent for smaller banks. Further cuts in the RRR had been widely expected this year, especially after a spate of weak data in recent months showed China's economy was continuing to lose steam. The size of the move was on the upper end of market expectations.
China reduced the ratio of cash its banks had to invest as reserves by 1 % in a bid to cut risks of an economic slowdown . The move by the People ’s bank of China was its fifth in the past decade and came as the bank faced challenges from weak growth and the tariff dispute with the US . The expected reduction would be introduced in two phases on 15 and 25 January . The ratios were 15 % for large banks and 12.5 % for smaller players before the cut was implemented .