China cuts two more key lending rates as economy sputters

The People's Bank of China cut another key policy rate on Tuesday for the first time in 10 months, as the world's second largest economy shows signs of stalling.

The latest rate cut come on the heels of two previous easing moves last week, as authorities seek to prop up growth.

The Chinese central bank cut the one-year loan prime rate by 10 basis points from 3.65% to 3.55%, and trimmed the five-year loan prime rate by 10 basis points from 4.3% to 4.2% — for the first time since August.

Tuesday's move was widely expected after a slew of economic data in the last few weeks — from industrial production and fixed asset investment to retail sales and trade in May — fell short of expectations. China appears to be teetering on the brink of deflation as reopening optimism fizzles.

Top investment banks, including Goldman Sachs and JPMorgan, recently cut their full-year GDP estimates for China, and warned of headwinds ahead.

Last Thursday, the PBOC cut its one-year medium-term loan facility for the first time in 10 months, and lowered its seven-day reverse repurchase rate on Monday last week.