The People's Bank of China, the country's central bank, announced on Friday it will cut the reserve requirement ratio for financial institutions by 0.25 percentage points on December 5.

The cut will release about 500 billion yuan ($69.75 billion) into the market and will be eligible for all financial institutions except those already adopting an RRR of 5 percent, the PBOC said in a statement on Friday.

The PBOC said the cut is aimed at maintaining liquidity, helping the economy achieve reasonable growth while lifting development quality and increasing long-term funding sources of financial institutions so they can better support industries and smaller businesses severely affected by COVID-19.

Bringing the weighted average RRR down to about 7.8 percent, the move will save about 5.6 billion yuan in annual funding costs for financial institutions, which can translate into lower financing costs of the real economy, the central bank said.