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Pan Gongsheng, governor of the People's Bank of China, delivers a speech during the 2024 Lujiazui Forum on June 19, 2024 in Shanghai, China.

BEIJING — China will cut the amount of cash banks need to have on hand, known as the reserve requirement ratio or RRR, by 50 basis points, People's Bank of China Gov. Pan Gongsheng said during a press conference on Tuesday.

Pan, who was speaking to reporters alongside two other financial regulator heads, did not indicate exactly when the central bank will ease the policy but said it would be in the near term. Depending on conditions, there may be another cut of 0.25 to 0.5 basis points by the end of the year, Pan added.

He also said the PBOC would cut the 7-day repo rate by 0.2 percentage points.

Lynn Song, chief economist for greater China ING, called the repo rate cut announcement "the most important" move made during the press conference.

"Markets had been leaning toward expecting multiple 10bp rate cuts, so a 20bp cut represents a slightly stronger than expected move," he said in a note on Tuesday. "However, the net impact will depend on whether we see further cuts ahead or whether the PBOC falls into a wait-and-see mindset after today's policy package."

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