China to cut bank reserves as 'hard landing' fears continue The People's Bank of China, the central bank, said it would cut banks' reserve requirements by 0.50 percentage points effective from May 18, according to a statement posted on its website. Sebastien Galy, senior currency strategist at Societe Generale, said: "This is a reaction to signs of a deeper slowdown than expected so that its positive impact outside of Chinese equities will be contained. Nonetheless policy makers are steadily starting to react the crisis (ECB, Fed still to come) which is encouraging. Beijing has already cut bank reserve requirements twice since December as it seeks to boost lending to spur growth, but economists have called for more policy support as economic figures continue to disappoint. After the latest move takes effect, China's reserve requirement for most large banks will fall to 20pc. China also said on Friday that the consumer price index, the main gauge of inflation, rose 3.4pc year on year in April, compared with 3.6pc in March.