Financial policy package injects cash, confidence into economic vibrancy

A 0.5 percentage-point reduction in the reserve requirement ratio for eligible financial institutions took effect on Thursday, with the move expected to inject roughly 1 trillion yuan ($139 billion) of long-term liquidity into China's financial market.

The RRR cut, the first such move since the start of the year, comes after the seven-day reverse repo rate was cut by 0.1 percentage point by the Chinese central bank, which took effect on May 8.

The reduction in the RRR and reverse repo rate, along with expanding re-lending facilities and sci-tech innovation bonds issuances, were among a raft of supportive measures announced last week by monetary and financial regulatory bodies, as the world's second-largest economy steps up efforts to stabilize markets and sustain economic recovery amid external headwinds.