It was the fourth time the central bank had cut interest rates since November. The PBOC also reduced the one-year lending rate by 25 basis points to 4.85 percent and the one-year deposit rate by 25 basis points to 2 percent.
At the same time, reserve ratios for lenders dependent on their lending activities will be cut by 50 basis points. Those banks include: state owned large commercial banks, joint-stock banks, foreign banks which lend certain levels to rural and small and medium companies.
On Friday June 26th, the Shanghai Composite Index fell 7.4 percent and was lower 19 percent since hitting a 52-week high on June 12.