China decided over the weekend to cut the amount of money banks are required to hold in reserve, after a host of weaker-than-expected indicators on Friday pointed to a further slowdown instead of recovery in the world's second largest economy.

The People's Bank of China replica gucci sunglasses, the country's central bank, announced Saturday it would lower banks reserve requirement ratio (RRR) by 50 basis points, effective from May 18, the third cut since November 2011. After the cut, the RRR will be lowered to 20 percent for the large financial institutions and to 16.5 percent for small and medium-sized ones.

The latest RRR cut came after major economic data for April showed that the economy was performing worse than expected, with industrial production growth dropping sharply to hit a three-year low, and fixed-assets investment growth nearing a decade-low point.

The two key indicators as well as a sharp decline in both export and import growth and a banking lending growth which was far below expectations during the past month serve to rattle nerves of the market concerning the economy's growth prospects, while the latest policy move may help allay fears of the nation's vulnerability amid a listless global economy, economists said.

"The cut in the reserve requirement is estimated to release 500 billion yuan ($79 billion) to pump up bank lending, which would be an important step to stimulate an economy hit by the global slump," said Tang Jianwei, a senior macroeconomic analyst at Bank of Communications in Shanghai.

The country would further ease liquidity to boost the economy, and there will be more RRR cuts within the year, Tang predicted.

"There may be hopes for interest rate cuts to revive the economic growth. But we reckon it would be unlikely within the year as the current interest rate level is just about on par with the inflation rate. In such context, interest rate cuts would renew concerns over negative interest rates," Tang explained.

The consumer price index, a main gauge of inflation, softened to 3.4 percent in April from 3.6 percent in March, the nation's statistical bureau announced Friday. In comparison, the nation's benchmark one-year rate stands at 3.5 percent.

RRR changes would be a key tool to manage bank liquidity in the near future, the central bank said in a quarterly report on monetary policies released Thursday cheap gucci belts, without mentioning possible adjustments of interest rates.

Holding the belief that the RRR cut signals more policy loosening, Lu Ting, China economist with Bank of America-Merrill Lynch in Hong Kong, said yesterday, "The pace of growth slowdown is now clearly bigger than the policymakers can tolerate, and we expect China to further ease credit supply."