China's central bank will reduce the amount of cash that some banks should keep as a reserve, opening up for 700 billion yuan ($ 108 billion) of liquidity as it seeks to control leverage and support small businesses.
The People's Bank of China announced that the required reserve ratio for some banks would fall by about 0.5 percent from July 5, the day on which the United States and China would impose tariffs on each other.
The move to cut reserves was widely expected, especially after the Chinese government said it would use monetary policy tools, including reducing the reserve rates of some banks, to increase the credit supply of small businesses, possibly not the last cut.
