China's central bank said on Wednesday that it will lower banks' reserve requirement ratio (RRR) by 50 basis points starting Dec. 5.

Photo taken on Nov. 7, 2011 shows the headquarters building of the People's Bank of China in Beijing, capital of China. The People's Bank of China, the country's central bank, announced Wednesday on its website that it will lower the bank reserve requirement ratio (RRR) by 0.5 of a percentage point as from Dec. 5, 2011. (Xinhua/Liu Jinhai)
The cut, the first of its kind since December 2008, will drop the RRR for large commercial banks to 21 percent.

The move comes amid easing inflationary pressure and slower economic growth. The economy's growth rate slowed to 9.1 percent in the third quarter of this year, down from 9.5 percent in the second quarter and 9.7 percent in the first quarter.

The National Bureau of Statistics reported a 5.5 percent increase in the Consumer Price Index (CPI) in October, which eased from a 37-month high of 6.5 percent in July.

As government tightening measures gradually take effect and international commodity prices decline, the CPI will fall under 4 percent in December and stand around 5.4 percent for the whole year, said Lian Ping, chief economist with the Bank of Communications.

To rein in runaway inflation, the People's Bank of China hiked banks' RRR six times and the benchmark interest rate three times this year.

VietNamNet/Xinhuanet