China to cut interest rates by 0.25%
China's central bank on Saturday announced that it will cut the benchmark deposit and loan interest rates by 25 basis points, as authorities seek to prop up flagging growth in the world's second-largest economy.
The move, which goes into effect Sunday and marks the second cut in four months, was largely expected amid a raft of weakening economic indicators, analysts said.
It comes days ahead of the opening of the annual meeting of China's rubber-stamp legislature, the National People's Congress, at which Premier Li Keqiang is expected to deliver an address on the state of the country's economy.
Last month, Beijing announced that China's gross domestic product rose an annual 7.4 percent in 2014 -- a 24-year low.
In a statement posted on its website, the People's Bank of China (PBoC) said it would slash its one-year rate for deposits to 2.5 percent and its one-year lending rate to 5.35 percent.
The bank pointed to "historically low inflation" as among the factors behind the move.
China's inflation plunged to a more than five-year low of 0.8 percent in January, fueling fears that the Asian giant is on the brink of a deflationary spiral.
The country’s last round of interest cuts came in November, when the bank slashed deposit rates by 25 basis points and the one-year lending rate by 40 basis points.
That move was followed this month by a step by the PBoC towards further monetary easing by cutting the percentage of funds banks must hold in reserve, known as the reserve requirement ratio.
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(Source: AFP)
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