PBOC announces sharp rate cuts

China's central bank cut interest rates by 108 basis points, the largest cut in more than 10 years, in a bid to boost a cooling economy, the Financial Times reported. Interest rates now stand at 5.58% for loans and 2.52% for deposits. The People's Bank of China (PBOC) also announced cuts in reserve requirements, by 100 basis points for large banks and 200 basis points for small and mid-sized banks to encourage lending. The cuts are seen as a sign that China's economic growth is decelerating more quickly than expected due to weakness in the export and property sectors. By easing lending, the PBOC hopes to encourage banks to back Beijing's recently announced US$586 billion stimulus package. The rate cut announcement helped to boost crude oil prices on hopes of increased Chinese demand.