China's central bank announced Friday it will cut the reserve requirement ratio (RRR) by 0.5 percent starting on September 16.

The move was aimed at lowering the actual cost of financing, and to support the real economy development, according to the statement issued by the People's Bank of China (PBOC).

This would be the third RRR cut this year, releasing a total of 900 billion yuan in liquidity to support the economy.

According to the central bank, all financial institutions' RRR will be cut by 0.5 percent, except for finance companies, financial lease companies and automobile finance companies, which this round of RRR cut doesn't apply to. 

In order to offer more support to private businesses and small-and-micro businesses, an additional RRR cut of one percent will be applied to municipal commercial banks that only operate on provincial level. The additional targeted cut will be in two phases, effective October 15 and November 15, each 0.5 percent.