The People’s Bank of China (PBOC) has decided to lower the reserve requirement ratio (RRR) for banks. This decision, effective immediately, is intended to ease liquidity pressures and bolster economic activity amid concerns about slowing growth.

The RRR is the percentage of deposits that banks are required to hold in reserve at the central bank. By reducing this ratio, the PBOC is effectively injecting more money into the financial system, allowing banks to lend more freely.

Economists believe this measure signals a shift in policy towards supporting growth. The specific impact on various sectors remains to be seen, but the overall expectation is that it will provide a boost to lending and investment.

Further details regarding the specific magnitude of the RRR cut and its implications are expected to be released by the PBOC in the coming days.