BEIJING, Jan 24 Reuters China39;s central bank will cut the amount of cash that banks must hold as reserves from Feb. 5, the first such cut for the year as policymakers extend efforts to shore up a fragile economic recovery amid plunging stock markets.

The world39;s secondlargest economy struggled to mount a strong postCOVID recovery last year as distress in the housing market, local government debt risks and weakening global demand slowed momentum, weighing on investors39; sentiment at the beginning of 2024.

People39;s Bank of China PBOC Governor Pan Gongsheng said on Wednesday at a press conference in Beijing that the bank would cut the reserve requirement ratio RRR for all banks by 50 basis points bps, adding the move would free up 1 trillion yuan 139.45 billion to the market.

It is the biggest such cut since December 2021, exceeding most analysts39; expectations.

The RRR cut is a sign that PBOC will stick to a loose monetary stance throughout this year, despite having missed market expectation of an mediumterm lending facility MLF rate cut earlier, said Xu Tianchen, senior economist at the Economist Intelligence Unit.

It39;s also a sign that policymakers across the government want to ensure a good start for the economy by frontloading policy support. This is needed to achieve their ambitious growth target in a challenging year.

The announcement of an RRR cut at a press briefing was unusual for the PBOC, which tends to signal such moves with statements posted…