The People's Bank of China further lowered the reserve requirement ratio for banks by 50 basis points, effective Jan. 6, Reuters reported.
The Chinese central bank's latest move will bring the reserve requirement ratio for big banks to 12.5% and will release about 800 billion yuan of liquidity into the economy, with small and medium-sized banks receiving around 120 billion yuan. This is the eighth reserve requirement cut since early 2018 as the central bank aims to shore up the economy, the news outlet added.
The central bank's move came as the U.S. and China are due to sign a phase-one trade deal Jan. 15, in a partial relief from the ongoing trade war between the two countries that resulted in tariffs on billions of dollars of goods traded by both sides.
As of Dec. 31, 2019, US$1 was equivalent to 6.96 Chinese yuan.