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China's central bank slashes the lending and deposit rates by 1.08 percentage points as of Thursday in the latest strong effort to stimulate economy.

The People's Bank of China (POBC) said on Wednesday it will cut the benchmark one-year yuan lending rate to 5.58 percent from 6.66 percent and the one-year yuan deposit rate to 2.52 percent from 3.60 percent.

The cut was substantially larger than earlier three cuts, 0.27 percentage points each, since mid September. It was the largest cut since October 1997 when the PBOC cut the one-year borrowing cost by 1.44 percentage points to support growth to withstand the Asian Financial Crisis.

It was the third time the PBOC cut the deposit rate since early October and the largest cut since June 1999.

The PBOC also said that as of Dec. 5, it will lower the reserve requirement ratio by 1 percentage points at the large banks and by 2 percentage points at the smaller and medium-sized banks.

The large lenders include Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China.

The monetary easing was aimed at "ensuring ample liquidity in the banking system and promoting stable credit growth to make the monetary policy play an active role in supporting economic growth", the POBC said in a statement.

The strong move highlighted the government's determination to meet challenges and promote economic growth, Li Yang, head of the Institute of Finance and Banking at the Chinese Academy of Social Science, told Xinhua.

China's economy has slowed sharply due to faltering growth in exports and property investment. The gross domestic product expanded 9 percent annually in the third quarter, down from 10.4 percent in the first half and 11.9 percent last year.

October's economic data released mid the month showed the economy would see further slowdown. The annual industrial output grew 8.2 percent last month, the slowest pace in seven years.