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* PBOC cuts RRR by 50 bps for all banks
* Cuts RRR for targeted smaller banks by extra 100 bps
* RRR cut releases combined 900 bln yuan in liquidity
* Says will maintain prudent monetary policy
* More support seen as economic growth near 30-year lows
* (Adds details, quotes)
BEIJING, Sept 6 (Reuters) - China's central bank said on Friday it was cutting the amount of cash that banks must hold as reserves for the third time this year, releasing a total of 900 billion yuan ($126.35 billion) in liquidity to shore up the slowing economy.
Analysts had expected China to announce more policy easing measures soon as the world's second-largest economy comes under growing pressure from escalating U.S. tariffs and sluggish domestic demand.
The People's Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) by 50 basis points (bps) for all banks, with an additional 100 bps cut for some qualified smaller lenders.
The PBOC has now cut RRR seven times since early 2018.
The broad-based cut, which will release 800 billion yuan in liquidity, is effective Sept. 16. The additional targeted cut will release 100 billion yuan in funding, and will be in two phases, effective Oct. 15 and Nov. 15.
"The move shows policymakers are increasingly worried but its far from enough to stabilize the economy," said Larry Hu, head of Greater China economics at Macquarie Group in Hong Kong.
"The key constraint is that everything is slowing down corporates are not willing to invest because of the trade war, a global slowdown, and weak infrastructure and property sector growth."
The latest move to spur bank lending followed a cabinet meeting on Sept. 4 that pledged to implement both broad and targeted cuts in the RRR "in a timely manner."
The PBOC said it will maintain a prudent monetary policy and avoid 'flood-like' stimulus, while increasing counter-cyclical adjustments and maintaining reasonable and abundant liquidity.
Analysts say China's economic growth has likely cooled further this quarter from a near 30-year low of 6.2% in April-June. Morgan Stanley says it is now tracking the lower end of the government's full-year target range of around 6-6.5%.
With Washington imposing new tariffs from Sept. 1, and threatening more measures from Oct. 1 and Dec. 15, some economists have recently cut their China growth estimates for next year to below 6%, which would breach Beijing's longer-term goal.
The central bank is also widely expected to cut one or more of its key policy interest rates in coming weeks -- for the first time in four years -- as it works to reduce corporate funding costs.
"I think it's very likely they will cut the LPR (loan prime rate) by about 5-10 bps later this month. I also expect another RRR cut of 50 bps by the end of this year, Macquarie's Hu said.
SLOW TO RESPOND
Despite a slew of support measures and policy easing since last year, China's economy is still struggling to get back on firm footing. July's data showed growth stumbled more sharply than expected as the intensifying trade war with the United States took a heavier toll on businesses and consumers.
Analysts say the problem is not a lack of credit -- the PBOC has injected generous amounts of liquidity -- but weakening business and consumer confidence as the trade war drags on. That has weighed on activity from manufacturing and investment to retail sales.
In the latest escalation in the protracted trade dispute, the United States began imposing 15% tariffs on a variety of Chinese goods on Sept. 1 - including footwear, smart watches and flat-panel televisions - and China began imposing new duties on U.S. crude.
The next high-level trade talks are slated for early October, but a lasting peace seems more elusive than ever. ($1 = 7.1230 Chinese yuan renminbi) (Reporting by Beijing Monitoring Desk; Yawen Chen, Stella Qiu, Leng Cheng and Kevin Yao, Editing by)