(MENAFN) China's central bank made a system-wide cut to bank reserve requirements (PRR), marking the first time it has done so in over two years, Khaleej Times reported.
The announcement cuts reserve requirements comes as the government is trying to unleash a fresh flood of liquidity to fight off economic slowdown and looming deflation.
The cut is set to 19.5 percent for big banks, which would free up to USD96 billion or more held in reserve at Chinese banks, which could inject USD324-USD486 billion into the economy.
"The central bank has tried to use short-term policy tools to inject more liquidity, but such tools were not enough, so it has to cut RRR," senior economist at Minsheng Bank in Beijing said.
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