China’s central bank has again cut interest rates and the reserve requirement ratio of banks in a bid to boost real economy.
This is the bank’s sixth round of interest cuts since last November.
The People’s Bank of China, or PBOC, on Friday announced the cuts on the reserve requirement ratio (RRR) of banks, and the benchmark interest rates.
The bank said from Saturday, the RRR for financial institutions will be slashed by 0.5 percentage points, to further reduce the cost of financing.
Interest rates for one-year loans and deposits will be cut by 0.25 percentage points to 4.35 percent and 1.5 percent respectively.
The RRR for qualified financial institutions supporting small and micro businesses and agriculture will be lowered by another 0.5 percentage points.
The central bank also said it would remove the upper limit of interest rates’ floating range for deposits in commercial banks and cooperative financial institutions in rural areas.
The central bank said these moves aim to establish a sound financial environment for restructuring and steady growth of the economy as the economy continues to slow and global financial markets fluctuate.
The bank said it would continue with the fine tuning of monetary policies, and implement various tools to provide adequate liquidity and ensure market stability.
China’s economy, under the “new normal” of slower growth and higher quality, expanded 6.9 percent in the third quarter of 2015.
It is the first time the quarterly growth rate has dropped below 7 percent since the second quarter of 2009.