China's central bank said it would lower the reserve requirement ratio for rural commercial banks in three stages.

The People's Bank of China previously announced a cut of the reserve ratio for small- and medium-sized rural commercial banks to 8% from 11.5%, which is expected to release about 280 billion yuan of long-term funding to the market. The move was aimed to direct lending to private and small businesses that are hit by tight liquidity and an economic slowdown.

The central bank said it has cut the ratio by 100 basis points on May 15. It will next cut another 100 basis points on June 17, and the final 150 basis points on July 15.

As of May 21, US$1 was equivalent to 6.90 Chinese yuan.