China cuts key interest rate 25 basis points

    The People's Bank of China cut its leading interest rate by 25 basis points and gave banks more freedom to set deposit rates for savers, the first time since 2008 China's central bank has cut rates.

    The PBOC said in a  statement that the "upper limit of the floating range of interest rates on deposits of financial institutions was adjusted to 1.1 times the benchmark interest rate" and banks would also be permitted to extend loans for 80 percent of the benchmark rate. The current limit for loans is 90 percent of the benchmark rate.

    The benchmark one-year lending rate will be cut to 6.31 percent from 6.56 percent, the level since July 2011.

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