China's central bank said Monday it will cut the amount of cash banks must keep in reserve for some small- and medium-sized locally-focused lenders from May 15, in a new easing measure to support the economy.
The move is expected to unleash 280 billion yuan ($41.5 billion) in long-term funds into the market, the People's Bank of China said in a statement.
“All the funds will be loaned to private and small companies,” the statement said.
About 1,000 rural commercial banks that focus on serving their local economies will benefit from the “lower favorable reserve requirement ratio” of 8%, the PBOC said, without specifying the margin of the cut.
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