China frees up $83 billion in cash for its banks as the economy faces its slowest growth in 3 decades

• China's central bank cut the level of money it requires banks to hold in reserves in a move to bolster economic growth.
• The People's Bank of China cut its reserve requirement ratio by 0.25% for commercial banks.

China's central bank on Friday reduced the amount of cash it requires banks to hold in their reserves, moving to bolster the nation's economy hurt by COVID-19 and facing its slowest growth in three decades.

The People's Bank of China cut its reserve requirement ratio, or RRR, by 0.25% for commercial banks. An additional cut of 0.25% was enacted for smaller commercial banks and rural lenders, according to a translation of the bank's statement.

The moves leave the weighted average of the reserve ratio in the banking system at 8.1%. The central bank said its aim is to support economic development and to promote stability of financing costs. The RRR reduction should push 530 billion yuan ($83.19 billion) of liquidity into the economy.

The RRR cut of 0.25% was below market expectations, according to the South China Morning Post. While the central bank cut the RRR, it unexpectedly decided not to reduce a key interest rate, leaving the one-year medium-term loan rate at 2.85%. In equity trading Friday, the SSE Composite in Shanghai fell 0.5% and the Shenzhen Composite Index fell 1%.

China has been dealing with a new round of COVID outbreaks that's prompted officials to order lockdowns for millions of people, notably in Shanghai and manufacturing hubs including Shenzhen.

Beijing in March set a 2022 economic growth target of around 5.5%, the lowest target since 1991.