Central Bank to reduce reserve requirement ratio for smaller local lenders

The Chinese central bank announced on Monday that it would reduce the amount of cash that banks will have to keep from May 15 for some small and medium-sized local lenders, as part of a new measure of Easing aimed at supporting the economy.

The move is expected to release 280 billion yuan ($ 41.5 billion) of long-term funds into the market, the People's Bank of China said in a statement.

"All funds will be loaned to private companies and small businesses," the statement said.

About 1,000 rural commercial banks that serve their local economies will benefit from the "lower and favorable reserve ratio" of 8 percent, the PBOC said, without specifying the margin of the cut.

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