Beijing cuts interest rate for third time in six months

In an effort to jumpstart the country's sluggish economy, China's central bank is slashing interest rates for the third time in six months, bank officials said on Sunday.

In light of "downward economic pressures" the People's Bank of China (PBOC) announced that it would reduce the rate on a one-year loan by commercial banks to 5.10 percent, a 0.25 percent reduction. The interest paid on a one-year deposit was also lowered by the same proportion to 2.25 percent. Following similar cuts in November and March, the new rates will take effect on Monday.

The slashing of interest rates illustrates the increasing urgency facing the Communist leadership to reverse an economic slump as well as a politically dangerous surge in unemployment.

Growth fell to the lowest level in more than two decades last year, and is predicted to drop further still in 2015.

Trade also shrank in the world's second-largest economy in the first quarter of the year, falling to 6 percent. Beijing hopes the cuts in interest rates will alleviate costs for state companies and inspire state-owned banks to boost lending.

es/jr (AP, Reuters)