China's central bank said Monday it has decided to cut the reserve requirement ratio

China's central bank said Monday it has decided to cut the reserve requirement ratio (RRR) for financial institutions to support the development of the real economy and reduce the comprehensive financing cost.

The ratio will be cut by 0.5 percentage points, effective on Dec. 15, except for those financial institutions that already implement a 5-percent RRR, said the People's Bank of China (PBOC) in a statement.

After the reduction, the weighted average RRR for Chinese financial institutions will stand at 8.4 percent, the central bank said.