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China Eases Bank Finance Requirement in Effort to Boost Economy

  • VOA News

Chinese currency

Chinese currency

China cut the amount of money its banks must keep in reserve, a move aimed at prodding them to make more loans to boost the country's weakening economy.

The People's Bank of China said Wednesday it is dropping the reserve requirement for commercial lenders by half a percentage point, down to 19.5 percent. It trimmed the reserve figure a full percentage point for banks that lend for agriculture and hydroelectric projects favored by Beijing.

The reserve cut, the first in three years for China, immediately adds about $96 billion to the balance sheets of China's state banks.

China's economy, the world's second largest behind the United States, advanced 7.4 percent last year. That was a substantially bigger gain than in the United States, Europe and Japan, but it was the weakest increase in 24 years for China.