Reserve requirements for smaller banks will be lowered from May 15, releasing 280 billion yuan (41.6 billion U.S. dollars) into the economy, according to an announcement Monday morning by the People's Bank of China.
A statement published on the PBOC's website said that the move would promote the reduction of financing costs for small and micro enterprises.
In its statement, the PBOC confirmed that it had decided to implement a lower preferential deposit reserve ratio for small- and medium-sized banks, focusing on regional areas and county-level areas.
The lower reserve requirements will apply to certain rural banks with assets of less than 10 billion yuan (1.49 billion U.S. dollars), applying to around 1,000 county-level agricultural and commercial banks.
The PBOC statement added that this policy move would release around 280 billion yuan of long-term funds, which would go towards the issuance of loans to private and small and micro enterprises.
