Reserve ratio for banks decreased

Liquidity shortage cited as reason for sudden drop

BEIJING / SHANGHAI - China's central bank lowered reserve requirements for commercial lenders for the first time since December 2008, a sign the country has started to ease its monetary stance as white-hot inflation is contained and economic uncertainties increase.

The central bank will reduce the ratio of money that banks have to set aside on deposit by 50 basis points among commercial lenders, effective on Dec 5, said the People's Bank of China in a statement on Wednesday.