China cuts reserve requirement ratio by 0.5 percentage points starting from May 15

(ECNS) -- The People's Bank of China (PBOC), China's central bank, said it has cut the reserve requirement ratio (RRR) by 0.5 percentage points for financial institutions, which took effect on Thursday.

The RRR for auto financing and financial leasing companies is cut by 5 percentage points.

According to the central bank, the move is expected to provide about 1 trillion yuan (about $138.9 billion) in long-term liquidity to the market.

After the reduction, the RRR for auto financing and financial leasing firms, which directly provide financial support for auto consumption and equipment upgrade investments, has come down to 0 percent, thus effectively enhancing their credit supply to these sectors, it said.

(By Zhang Dongfang)