UPDATE 1-Kazakh c.bank to cut banks' reserve requirements

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ASTANA, May 28 (Reuters) - Kazakhstan's central bank plans to inject more than $800 million into the banking sector by cutting reserve requirements on banks' foreign liabilities, a central bank official said on Wednesday.

The global liquidity squeeze has limited Kazakh banks' access to international debt markets and triggered a domestic credit crunch, slowing down the growth of the whole economy.

Deputy chairman Bisengali Tajiyakov told a parliament session mandatory reserve requirements -- a proportion of borrowed funds that cannot be lent to banks' customers -- would be cut to six percent from the current eight.

The central bank had planned to raise the figure to 10 percent last year, just before the global liquidity squeeze, but then postponed the measure until July 1. Tajiyakov gave no timeframe for the revised measure.

"According to our estimates this measure will allow banks to free up 100 billion tenge ($829 million) in extra liquidity," Tajiyakov said.

The government expects economic growth to slow down to 5.5 percent this year from last year's 8.5 percent, but hopes it would pick up in 2009. (Reporting by Raushan Nurshayeva; Writing by Olzhas Auyezov) (Editing by George Obulutsa)