China Makes Big Cut to Bank Reserve Requirement

(Beijing) – The People's Bank of China said on April 19 that it would lower the amount of cash banks are required to hold in reserves by 100 basis points, or 1 percentage point, effective the next day. Some rural lenders were allowed to cut their ratios even more.

The move had been anticipated as the economy continued to slow in the first quarter, but many analysts said they were surprised by the strength of the reduction. Previous cuts to the ratio were seldom higher than half a percentage point.