China is making efforts to bring its economy back on track.
According to a statement released by China's central bank on Monday it will cut the reserve requirement ratio by ZERO point FIVE percentage points. aiming to provide a liquidity boost to the economic slowdown.
The cut came as Premier Li Keqiang said during a virtual meeting with IMF officials on Friday that the cut will be take effect at an "appropriate time."
Starting December 15th the cut will be effective for key commercial banks releasing around 188 billion U.S. dollars of long-term liquidity.
MEANING banks can expand their loan books so that businesses can access credit much easier.
However, the cut will be applied to all banks except small rural banks that are on the lowest level of 5-percent.
The central bank's statement said after the cut by the People's Bank of China the weighted average ratio for financial institutions will be 8-point 4 percent a decrease from 8.9 percent from the past.
However, this attempt to stimulate the country's economy is not the first time the central bank has made a similar move.
The country's central bank cut the ratio by the exact same points-- ZERO point FIVE percent -- for all banks from July 15th 2021 which was expected to release around 154 billion U.S. dollars in long-term liquidity.
The statement of China's central bank also said the cut will create suitable monetary and financial conditions for high-quality development adding that it will bring down overall financing costs in the country.
Choi Won-jong, Arirang News.