Central bank cuts interest rates, reserve requirement, lifts deposit rate ceiling

The People’s Bank of China cut the one-year benchmark bank lending and deposit rates by 25 basis points to 4.35% and 1.5% effective Saturday, in addition to lowering the largest Chinese banks’ reserve requirement ratio by 50 basis points to 17.5%, Reuters reported, citing a statement on the central bank’s website. The move came minutes after state radio quoted Premier Li Keqiang as saying China would make “reasonable use” of such cuts. The bank also announced it was freeing the interest rate market by scrapping its ceiling on deposit rates, a move it has promised to deliver for months that should in theory allow Chinese banks to price loans according to their risk.