China on Sunday announced a big cut in the amount of cash commercial banks have to put aside at the central bank, a move that will make an extra US$110 billion available for lending as Beijing works to shore up confidence in its economy and markets. The People’s Bank of China (PBoC) said it would cut the reserve requirement ratio by one percentage point from October 15 to ensure reasonable credit growth and support economic development. As a result, banks will be handed 1.2 trillion yuan, of which 450 billion yuan (US$65 billion) will be used to repay their own borrowings from the central bank and the rest for lending.

Analysts said it was a signal that Beijing was becoming increasingly worried about the domestic economic situation amid the trade war with the United States.