China cuts interest rates by 0.25 percentage points: central bank

The People's Bank of China announced that it was reducing lending and deposit interest rates and its reserve requirement ratio.
The People's Bank of China announced that it was reducing lending and deposit interest rates and its reserve requirement ratio.PHOTO: REUTERS

BEIJING (AFP) China's central bank on Tuesday cut its benchmark interest rates and the amount of cash banks must keep on hand, the latest stimulus aimed at boosting the world's second-largest economy as it battles a collapse in share prices.

The People's Bank of China (PBoC) announced on its website that it was reducing lending and deposit interest rates by 0.25 percentage points each and its reserve requirement ratio (RRR) by 0.50 percentage points.

The moves take effect Wednesday, it said, and follow similar tandem cuts in late June.

The PBoC has now cut benchmark interest rates five times since November as authorities try to head off a too sharp deceleration in economic growth.

Reducing the RRR is also a stimulatory measure as it increases the amount of money banks can lend out, so can boost economic activity.

China's plunging share markets and rising concerns overseas about its growth outlook have spurred a global rout in equity markets amid concerns the world economy could suffer if China's weakens too precipitously.