China cuts amount banks hold in reserve to boost lending [Video]

China on Friday cut the amount banks must hold in reserve, releasing an estimated $142.6 billion in liquidity into the financial market as leaders embark on one of their biggest drives in years to kickstart growth.

The move by the People’s Bank of China comes a day after President Xi Jinping and other top officials admitted to “new problems” in the world’s second-largest economy and outlined plans to get it back on track.

Beijing has this week unveiled a raft of measures to boost the economy, which it has targeted to grow five percent this year — an objective analysts say is optimistic given the many headwinds it faces.

Also Friday, the bank cut the seven-day reverse repo rate — the short-term interest paid by the central bank on loans from commercial lenders — from 1.7 percent to 1.5 percent.

Growth in China is being dragged down by a prolonged …