The economy is wrestling with mounting downward pressure and the sagging property sector, previously a major growth propeller, is now one of the main drags.

In addition to the RRR reduction, an extra 1 percentage point cut was given to commercial banks engaged in lending to the farming sector, and a 2 percentage point cut to the Agricultural Development Bank of China.

China conducted selected RRR cuts twice in 2014 targeting the agricultural sector, and as a result, loans flowed to it apace.

The outstanding agricultural loans amounted to 23.6 trillion yuan at the end of 2014, surging 13 percent from a year earlier.

Lu Lei, head of the central bank's research department, said the RRR cut, which differs from fiscal policy easing, will benefit farmers indirectly, and signals policy orientation to the market.