China's central bank has announced that cuts in both interest rate and reserve requirement ratio in an effort to boost domestic economy amid worries over global financial crisis.

The People's Bank of China said the deposit and lending rates will be lowered by 0.27 percentage points from Thursday and the reserve requirement ratio will be down by 0.5 percentage points from October 15th.

The State Council or cabinet said it will scrap the 5% individual income tax on savings interest earnings starting recently to boost domestic demand.