China Cuts Banks’ Reserve Ratios Again, Frees Up $115 Billion to Spur Economy

A clerk arranges bundles of 100 Chinese yuan banknotes at a branch of China Merchants Bank in Hefei, Anhui Province, China on March 17, 2014. Reuters

BEIJING—China’s central bank said on Jan. 1 it was cutting the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan ($114.91 billion) in funds to shore up the slowing economy.

The People’s Bank of China (PBOC) said on its website it will cut banks’ reserve requirement ratio (RRR) by 50 basis points, effective Jan. 6. The move would bring the level for big banks down to 12.5 percent.