China cuts reserve ratios for some banks to spur lending amid epidemic

China's central bank said on Friday it was cutting the amount of cash that some qualifying banks must hold as reserves for the second time this year, releasing 550 billion yuan ($79 billion) in liquidity to support the economy, which has been jolted by a coronavirus outbreak. The People's Bank of China (PBOC) said on its website that it would cut the reserve requirement ratio (RRR) by 50-100 basis points (bps) for banks that have met inclusive financing targets.

The RRR for qualified joint-stock banks would be reduced by an additional 100 bps, it added. The targeted cut, the ninth since early 2018, will be effective from March 16.

The central bank has been easing monetary policy since the virus outbreak, cutting the benchmark lending rate and telling banks to offer cheap loans and payment relief to firms that have been hardest hit by the coronavirus outbreak. Analysts polled by Reuters expected China's economic growth to tumble to 3.5% in the first quarter from the previous quarter's 6.0%. ($1 = 6.9829 Chinese yuan renminbi)