China’s central bank plans to inject Rmb500bn ($81bn) into the banking system, according to local traders and analysts, in the latest targeted attempt by Beijing to prop up flagging growth in the world’s second-largest economy.

The move is seen by many as a response to the economy slowing last month. Among other weak data, industrial output in August underwhelmed with 6.9 per cent annual growth, the lowest reading since the global financial crisis. It also comes at the end of the financial quarter and ahead of national holidays starting on October 1 – both times when liquidity is particularly tight.

The People’s Bank of China has quietly offered the funds to China’s five largest banks on a temporary three-month basis through a relatively new mechanism known as the standing lending facility. The amount is equivalent to a half a percentage point cut to China’s reserve requirement ratio (RRR) – the level of cash commercial lenders must leave on deposit with the PBoC, according to analysts.