China’s central bank, the People’s Bank of China, on Wednesday cut the amount of money that it requires the country’s commercial banks to stash away for a rainy day, a measure called the reserve requirement ratio. The move will essentially inject about $115 billion into the financial system after it goes into effect on Monday. The cut comes after a similar move in September.
The change, announced on the New Year’s Day holiday, is likely to focus renewed attention on the health of the Chinese economy, a major driver of global growth. While the move is relatively modest given the vast size of the Chinese economy, it follows a recent meeting of the country’s top economic planners and comes just a few weeks before Beijing releases its growth figures for the last three months of 2019. China’s leaders are contending with the country’s slowest pace of growth in nearly three decades.