China cuts bank reserve ratio by 50 basis points

China’s central bank said on Wednesday that it will cut the required reserve ratio for commercial lenders by 50 basis points from 6 January to help bolster the slowing economy.

According to the People’s Bank of China, the move will release around 800 billion yuan (£87bn) of liquidity into the financial system. As it stands, the required reserve ratio is 13% for big banks and 11% for smaller ones.

The latest cut by the PBOC means it has reduced the reserve requirement for banks eight times since early 2018.

"The move should further increase availability of credit and support the ongoing recovery, thus signalling monetary support will continue as we move into 2020," Danske Bank said.