China's central bank took action on Friday to bolster the nation's struggling economy by cutting a key rate for banks, according to a statement from the People's Bank of China.
The reduction of the minimum reserve requirement by 0.5 percentage points allows banks to hold fewer compulsory deposits, freeing up more funds for lending or purchasing government bonds.
The move, aimed at financing infrastructure and other projects, aligns with the central bank's intention to maintain its "supportive monetary policy."
People's Bank of China Governor Pan Gongsheng had already announced a package of measures earlier in the week.
The rate cut comes just a day after a meeting of the Politburo, the Communist Party of China's top leadership body, which typically assesses the economy later in the year.
The unusual timing of the meeting was seen by many observers as a sign of the growing urgency to address China's economic slowdown.
Experts have been cautioning for some time that Bijing may struggle to hit its growth target of around 5% this year, partly due to the real estate crisis and weak domestic consumption.
The official report from the Politburo meeting promised more government spending and support for the real estate sector, although specific details were not provided.
The news, combined with speculation about a special issue of government bonds to stimulate consumption, sparked a rally in China's financial markets.
