China cuts reserve requirement for fourth time

Central bank of China reduces reserve requirement ratio by 50 basis points to support growth

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

China's central bank on Saturday cut the reserve requirement ratio for certain banks by 50 basis points, a third reduction in nearly 5 months, as it seeks to spur bank lending and combat slowing economic growth.

In a statement on its website, the People's Bank of China said it would cut rates for banks serving the country's farm sector and those that lend to small and medium-sized enterprises, adding that the reduction would take effect on Sunday.

The People's Bank of China last cut the reserve requirement ratio for all commercial banks by 100 basis points on April 19, following a 50-basis-point cut in February.

Although further cuts had been expected as economic growth sputters, Saturday's changes follow a plunge of 20 percent in China's stock market in the last two weeks.