(Yicai Global) June 24 -- China's central bank announced it will cut commercial banks' reserve requirement ratio by 50 basis points.

The People's Bank of China made the announcement on Sunday afternoon, with the new requirement ratio to take effect on July 5th.

Analysts expect PBOC's latest decision may add about CNY 700 billion liquidity into the market.

The central bank said in a statement that banks should use the funds to support "debt to equity swap" projects and small and medium-sized firms.