China cuts rates, reserve limits after stocks dive

China’s central bank cut interest rates and lowered the amount of reserves banks must hold for the second time in two months yesterday, ratcheting up support for a stuttering economy and a plunging stock market that has sent shockwaves around the globe.

The moves came after Chinese stocks tumbled again yesterday, as investors despaired at the lack of policy action from Beijing in response to recent data suggesting the downturn in the world’s second-largest economy was deepening.

The People’s Bank of China said it was cutting the one-year benchmark bank lending rate by 25 basis points to 4.6%; cutting one-year benchmark deposit rates by the same amount, and reducing reserve requirements (RRR) by 50 basis points to 18% for most big banks.