China's central bank said Friday that it will reduce the ratio of cash to loans that domestic lenders need to hold on their balance sheets, a move that will add around $220 billion to the nation's financial system as officials attempt to re-ignite growth in the world's second-largest economy.

The People's Bank of China said the so-called Reserve Requirement Ratio (RRR) will be reduced by 1%, with 50 basis points starting on January 15 and a further 50 basis points following on January 25. The reduction should release around 1.5 trillion ($218 billion) in liquidity, the PBOC said, and will lower bank interest rate costs by 20 billion yuan each year. The RRR for larger banks currently sits at 14.5%, while the ratio for smaller lenders is 12.5%.

"The cut should be seen as a targeted adjustment, rather than flooding the financial system," the PBOC said in a statement alongside the RRR announcement.

The decision boosted U.S. equity futures, with contracts tied to the Dow Jones Industrial Average I:DJI jumping more than 75 points to indicate an opening bell gain of 290 points, while benchmark 10-year government bond yields eased to around 2.605%. 

The PBOC move followed data earlier this week that showed the country's key manufacturing sector slipped into contraction in December, the first such decline in nearly two years, ending a quarter in which GDP likely sputtered to its slowest pace since 2009.

Last month, China's Central Economic Work Conference, a key government committee led by President Xi Jinping that plans and sets the agenda for the broader economy, pledged to cut taxes "significantly", open domestic markets to foreign ownership and implement the consensus achieved on trade with the U.S. from the G20 Summit in Argentina.

The Conference's ambitions for 2019, which were made through statements China's state-controlled Xinhua News Agency Friday, suggest the current tensions in the relationship between Washington and Beijing haven't swayed officials from their larger aim of reforming the world's second-largest economy as it slows in the wake of the damaging trade war that erupted earlier this year.

The Conference also said government fiscal policy would be "proactive" next year, suggesting a tax cut that would top the 1.3 trillion yuan reduction put in place earlier this year.

Monetary policy from the People's Bank of China should be "prudent", the Committee said, with an appropriate balance between tightening and loosening, raising the prospect of a cut in benchmark interest rates or the reserve requirement ratio next year.

The Conference aslo said China would not only ease rules on foreign business ownership, but it would also promote their broader interests, specifically citing the sensitive issue of intellectual property rights. State media also said Xi "calmly and appropriately handled Sino-U.S. tensions on economy and trade"