The People's Bank of China (PBoC) said in a statement on its website that it is slashing its one-year rate for deposits by 0.25 of a percentage point to 2.75 percent and its one-year lending rate by 0.40 of a percentage point to 5.6 percent, both effective Saturday.
The surprise move -- the first interest rate cut since June 2012 -- came as China's economy expanded 7.3 percent in the July-September quarter, down from 7.5 percent in the previous three months and the slowest since 2009 at the height of the global financial crisis.
Since April, China has used a series of limited measures to underpin growth, including targeted cuts in reserve requirements -- the amount of funds banks must put aside -- and injecting cash into the country's five biggest banks for re-lending.
Analysts, however, have said recent weakening economic indicators, including manufacturing and industrial output, were likely to pressure authorities to take bigger steps.