The central bank to cut banks’ reserve ratio by 0.5 percentage point

The People’s Bank of China, China’s central bank, has decided to reduce reserve requirement ratio by 0.5 percentage point, effective on May 18, 2012.

This is the second cut of reserve requirement ratio in 2012. After the reduction, reserve requirement ratio of large financial institutions will down to 20%, and 16.5% for small and medium-sized financial institutions.