China cuts RRR by one percentage point

BEIJING, April 19 (Xinhua) -- China will lower banks' reserve requirement ratio (RRR) by one percentage point, the central bank announced on Sunday.

The cut, effective from Monday, is the second such move this year. On Feb. 4, the People's Bank of China lowered the RRR, the amount of cash that banks must hold as reserves, by half a percentage point.

Meanwhile, to step up financial support to targeted areas, the central bank decided to cut the RRR by an extra one-percentage point for certain commercial banks lending to small enterprises, the farming sector and major water projects.

The Agricultural Development Bank of China, the sole policy lender for agriculture, gets a RRR reduction of 2 percentage points.

Sunday's RRR cut was within market expectation following lackluster economic performance in the first quarter. China's gross domestic product (GDP) growth slowed to 7 percent in the first quarter from 7.3 percent in the final three months of last year, marking the worst result in six years and indicating continuing downward pressure on the economy.

Though the growth in the first quarter met the official target of around 7 percent for 2015, the slowdown in several areas, including industrial output and retail sales, has caused concern.