China's central bank cut loan and deposit rates by 0.27 percentage points Monday, effective Tuesday, in the government's latest move to stimulate the economy.
It was the fifth time the People's Bank of China (PBOC), the central bank, has cut rates since September this year.
The benchmark one-year yuan lending rate will fall to 5.31 percent from 5.58 percent and the one-year yuan deposit rate will fall to 2.25 percent from 2.52 percent.
In the three earlier cuts in September and October, the central bank lowered interest rates by 0.27 percentage points each. In the fourth cut on Nov. 26, the PBOC slashed the lending and deposit rates by a bigger-than-expected 1.08 percentage points.
The central bank also said that as of Thursday, it will cut the bank reserve requirement ratio by 0.5 percentage points. It will be the fourth time the central bank cuts the ratio since September.
The interest rate cut came almost one week after central bank governor Zhou Xiaochuan said in Hong Kong that whether or not to further cut the rates depended on the rise of the consumer price index (CPI), the main gauge of inflation.
From now till mid-2009, there existed possibilities of further interest rate cuts, he said then.
The National Bureau of Statistics said on Dec. 11 that the country's CPI rose at a slowing annual rate of 2.4 percent in November.
The CPI rate had slowed for seven straight months because of a sharp fall in world commodity prices and sluggish demand amid the global financial crisis.
(Xinhua News Agency December 22, 2008)