China cut the amount of cash banks must set aside as reserves in a bid to boost the supply of loans, as capital outflows and weakness at the nation's factories suggest a slowdown in the world's second-largest economy is deepening.

The reserve ratio will fall 50 basis points on Thursday, the People's Bank of China (PBOC) said on its website Wednesday. The level will drop to 19.5 percent, based on previous statements, while some lenders to rural and small business get bigger reductions.

The PBOC joins more than a dozen global counterparts in easing monetary policy this year as tumbling commodity prices provide scope to support growth. While Premier Li Keqiang told global business leaders last month not to worry about weakening Chinese growth, the latest step signals policy makers are concerned the slowdown has yet to reach bottom.