BEIJING, Oct. 15 (Xinhua) -- China's central bank on Tuesday skipped open market operations as the first phase of a targeted reserve requirement ratio (RRR) cut goes into effect.

Tuesday's reduction in the cash that lenders must hold as reserves will inject around 40 billion yuan (about 5.66 billion U.S. dollars) of long-term capital into the market, the People's Bank of China (PBOC) said on its website, adding that it would skip reverse repo operations as liquidity in the banking system stays at a reasonably ample level.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

The PBOC previously announced to reduce the RRR by a total of 100 basis points for city commercial banks operating only in provincial administrative areas in a bid to boost financing for small and private firms.

The targeted cut in RRR will be implemented in two phases, with the first phase of a 50-basis points reduction going into effect Tuesday, while the second phase cut of the same amount will take effect on Nov. 15.

The two phases of cut are expected to release capital totaling 100 billion yuan, the central bank said in the previous statement.

The targeted cut came after a broad-based RRR reduction of 50 basis points that went into effect on Sept. 16, unleashing about 800 billion yuan of long-term capital. Enditem

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