China’s central bank said Monday it would cut the one-year benchmark lending rate by 0.27 percentage point from Tuesday and cut the reserve requirement ratio for smaller financial institutions from Sept. 25 to boost economic growth.

The PBOC had previously been raising interest rates and banks’ reserve ratio requirements to cool down economic growth and bring inflation under control. The move, announced on a public holiday, shows the government has shifted its policy priority to economic growth.
The comment follows a statement by Wall Street investment bank Lehman Brothers Holdings Inc. early Monday that it would file for Chapter 11 bankruptcy, setting off fresh jitters in global financial markets.
China’s benchmark deposit interest rate will remain unchanged, the PBOC said in a statement posted on its Web site.
(Source: wsj.com)