Financial institutions will need to carry just 4% of their foreign exchange deposits in reserve starting Sept 15, the People’s Bank of China said today, compared to the current level of 6%.

The move effectively boosts the amount of foreign currency available in the local market, making it relatively more appealing for traders to buy the yuan.

China’s currency slid toward its weakest level since 2007 against the dollar in August, after a surprise interest rate cut failed to boost investor sentiment damaged by ongoing economic weakness.

The currency has fallen around 5% this year amid China’s yawning rate divergence with the US and is among Asia’s worst performers next to the yen and Korean won.

The offshore yuan rose 0.3% to around 7.255 per dollar after the news.

“Previous experience suggested that the yuan will be supported briefly by similar measures, but it has not been a step to turn around the direction of dollar-yuan in the medium-to-long term,” said Becky Liu, head of greater China macro strategy at Standard Chartered. “It is a widely expected move.”

The PBOC has ramped up support for the currency via tools such as setting stronger-than-expected daily reference rate, prompting state banks to sell dollars and tightening offshore yuan liquidity to squeeze shorts.

The moves are part of a series of stimulus measures, the latest of which was a reduction in downpayments for mortgages to help the country’s residential property market.

Cutting FX reserve requirements has been part of the China’s playbook of yuan support over the past two years. It last deployed the tool in September.

“We see this as a bid by authorities to improve FX funding onshore and to further lower the US-CH rate gap,” said Eddie Cheung, senior emerging market strategist at Credit Agricole CIB in Hong Kong.

“The rate gap has also narrowed since the macro-prudential adjustment coefficient for cross border financing but this is a step further.”