)
China's central bank on Tuesday cut interest rates and simultaneously relaxed reserve requirements for the second time in two months on Tuesday, cranking up support for a stuttering economy and a plunging stock market that has sent shockwaves around the globe.
The People's Bank of China (PBOC) said on its website that it was lowering the one-year benchmark bank lending rate by 25 basis points (bps) to 4.6%, effective from August 26. One basis point is one-hundredth of a percentage point.
The central bank also reduced one-year benchmark deposit rates by 25 bps, it said.
At the same time, the PBOC said it was also lowering the reserve requirement ratio by 50 bps to 18.0% for most big banks. The change will be effective on September 6.
The move comes after Chinese stock indexes nosedived more than 7%, hitting their lowest levels since December, following their more than 8 percent plunge on Monday.
The central bank shocked global markets by devaluing the yuan by nearly 2% on August 11. The PBOC called it a free-market reform but some saw it as the start of a long-term yuan depreciation to spur exports.
