The People's Bank of China (PBOC), China's central bank, decided on Wednesday to cut the reserve requirement ratio (RRR) for financial institutions by 50 basis points from Jan 6 to spur the real economy.

Headquarters of the People's Bank of China (PBOC), the central bank, is pictured in Beijing, Sept 28, 2018. (Photo: VCG)

The move will cut the cash that lenders must hold as reserves, releasing about 800 billion yuan ($114.6 billion) of long-term liquidity to bolster the economy and reduce social financing costs.