China's central bank has announced its decision to lower banks’ reserve requirement ratio (RRR) - the minimum level of reserves banks must hold - by 50 basis points effective from February 5. This is the first universal RRR cut for Chinese banks since May 2012.
Meanwhile, the central bank has increased support for some targeted areas, cutting the RRR by an additional 50 basis points for qualified city and rural commercial banks engaged in proportionate lending to small firms, the farming sector and major water projects.
In November 2014, China’s central bank had cut benchmark interest rates for the first time in more than two years.