Massive rates cut a surprise to all

The central bank yesterday cut the benchmark interest rate by 1.08 percentage points, the highest in 11 years, to stimulate the economy battered by the global financial and other economic woes.

It also cut the proportion of money six big commercial banks have to hold as reserve by 1 percentage point to 16 percent. The cut in reserve requirement, which comes into effect from Dec 5, for the smaller banks is 2 percentage points to 14 percent.

The interest rate cut, which takes effect from today, is substantially larger than the previous three this year, 0.27 percentage points each, since mid September.