People's Bank of China announces interest rates cuts
中国人民银行宣布下调利率

The People's Bank of China announced interest rate cuts on Friday, rallying indexes on the Shanghai and Shenzhen exchanges as trading began early Monday morning.

The country's central bank is slashing benchmark interest rates for the first time in more than two years. It trimmed the benchmark lending rate by 40-basis points to 5.6 percent, and the one-year deposit rate was cut by 25-basis points from 3 percent to 2.75 percent.

Despite the cut in the deposit rate, the PBOC raised the ceiling for deposit rates to 1.2 times the benchmark level from 1.1 times previously.

A PBOC statement said the purpose of cutting the deposit and lending rate is to scale down actual interest rates and lower financing costs for many enterprises.