China cuts benchmark mortgage interest rate amid property crisis

China's central bank cut its benchmark mortgage interest rate Tuesday for the first time in eight months to shore up the real estate market amid a prolonged property crisis in the world's second-largest economy, Kyodo reports. 

The People's Bank of China said it had lowered the five-year loan prime rate by 0.25 percentage point to 3.95 percent, the first reduction since June last year. The bank left unchanged the one-year loan prime rate, which serves as the benchmark lending rate, at 3.45 percent.

The mortgage rate cut followed a monetary easing move implemented on Feb. 5 to slash the amount of cash that banks must hold as reserves, which was aimed at pumping about 1 trillion yuan ($140 billion) of liquidity into the country's economy.

China's economy has been slowing, with its real estate sector hit by the heavy debts of major developers China Evergrande Group and Country Garden Holdings Co.

Amid concern it could slide into deflation, the Asian powerhouse is also grappling with high youth unemployment, subdued external demand and mounting local government debt.