China’s central bank has cut its reserve requirement ratio for the fifth time since February 2015, as it attempts to prop up its slowing economy.
Its reserve requirement ratio – the amount of cash that banks must hold in reserve in case of economic difficulty – has been lowered by 50 basis points for all banks effective from March 1st.
As it deals with a dramatically slowing economy, the Chinese central bank have implemented an aggressive easing policy designed to keep the country’s economy afloat, and last cut the requirement in October, alongside a further reduction in interest rates.
Chinese shares in decline
Chinese shares declined again on Monday on a further weakening of the yuan. The Shanghai Composite fell 2.7 percent after a brief recovery on Friday, hitting a 15-month low as the yuan hit its lowest point against the dollar in a month.
The Hang Seng was also hit, but fared slightly better, closing down 1.3 percent.