The People's Bank of China (PBoC) also cut interest rates for the first time since April 2020, reducing the loan interest rate, which is taken as the policy rate, by 5 basis points to 3.80 percent.
The bank's move comes after it injected 1.2 trillion Chinese yuan of liquidity into the market last week through the reserve requirement step.
China has lowered benchmark loan interest rates (LPR) for the first time in 20 months to spur growth in its slowing economy, but is still avoiding easing conditions in the country's debt-stricken real estate sector.
ONE YEAR LPR DECREASE 5 BASE POINTS
The one-year LPR was lowered by 5 basis points from 3.85 percent to 3.80 percent, while the 5-year LPR was left at 4.65 percent.
DISCOUNT WAS EXPECTED
Loan interest rates were reduced for the first time since April 2020. Of the 40 traders surveyed by Reuters last week, 29 predicted a reduction in LPR.
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