China Frees Up $56 Billion for Virus-Hit Economy by Slashing Small Banks’ Reserve Requirements

A woman wearing a mask walks past the headquarters of the People's Bank of China, the central bank, in Beijing, China, as the country is hit by an outbreak of the new coronavirus, on Feb. 3, 2020. Jason Lee/Reuters

BEIJING—China’s central bank said on April 3 it was cutting the amount of cash that small banks must hold as reserves, releasing around 400 billion yuan ($56.38 billion) in liquidity to shore up the economy, which has been badly jolted by the coronavirus crisis.

The latest stimulus move comes as the world’s second-largest economy looks likely to shrink for the first time in at least 30 years. Hopes for a quick recovery are being soured by the rapid spread of the disease worldwide, crushing global demand.