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China cuts interest rates to boost economy

China has cut interest rates for fifth time in nine months in a new effort to boost slowing economic growth.

The central bank said the benchmark rate for a one-year loan will be cut by 0.25 percentage point to 4.6% and the one-year rate for deposits will fall by a similar margin to 1.75%.

The bank also increased the amount of money available for lending by reducing the minimum reserves banks are required to hold by 0.5 percentage points.

The moves had been anticipated by financial analysts after exports, manufacturing and other economic indicators were weakened by larger margins than expected.

Beijing reported economic growth held steady at 7% in the latest quarter but that was due to a stock market boom that pushed up the contribution from financial industries while other sectors weakened.

In a statement, the central bank cited "downward pressure" on China's economic growth rate and said it wanted to lower financing costs for Chinese companies.

The bank also promised to pay close attention to liquidity, or the availability of credit, in a possible attempt to ease concerns that a recent rise in capital outflows from China might leave less money for lending.

Exports in July fell by an unexpectedly large margin of 8.3% while a manufacturing survey found activity this month contracted at a faster rate than anticipated.

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