The People's Bank of China (PBOC) said on Saturday it will fine tune monetary policy in a pre-emptive way and control the pace of deleveraging.
The agreement was first established in 2009 and renewed in 2012 and 2015.
Thanks to the central bank turning on the liquidity taps, the cost for banks to borrow from one another is now lower than the cost to borrow from the People's Bank of China.
The central bank has plenty of tools to stabilize the market, which will keep the yuan flexible and allow it to move in both directions.
Only one of 20 traders and analysts surveyed said the yuan will fall below 7 per dollar in the next three months, a milestone level that was last crossed more than a decade ago.
The onshore yuan has tumbled due to the escalating trade war and slowing Chinese economic growth.
The People’s Bank of China says it will lower the reserve-requirement ratio on large commercial lenders and some other banks by 1 percentage point, effective April 25.
In a memo, PBOC vice governor Pan Gongsheng says the government will continue applying pressure to the virtual currency trade.