The head of the People's Bank of China (PBOC), China's central bank, has announced plans to reduce the reserve requirement ratio (RRR) by 0.5%p and inject 1 trillion yuan of liquidity into the financial system. These measures are aimed at supporting the economy amid the ongoing COVID-19 pandemic. The RRR is the amount of money that banks are required to hold in reserve with the central bank. By reducing the RRR, the PBOC is releasing more money into the banking system, which can then be lent out to businesses and consumers. This should help to increase economic activity and support growth. The PBOC is also supplying 1 trillion yuan of liquidity through open market operations. This means that the central bank will buy government bonds, which will increase the money supply and lower interest rates. This should also help to stimulate economic activity. These measures by the PBOC are expected to have a positive impact on the Chinese economy. They should help to increase economic growth, support employment, and stabilize financial markets.