NEW YORK (CNNMoney) -- China's central bank said it would cut the amount banks must hold in reserve, a step toward boosting lending and maintaining strong economic growth.
The People's Bank of China said it would cut the so-called reserve requirement by 0.5%, the second such move in three months, following several increases since 2008.
The decision comes as China tries to pull off a soft landing: It must let economic growth slow enough to prevent inflation -- but it doesn't want growth to slow too much.
Inflation in China is already a concern, rising at a rate of 4.5% as of January, though that is more tame than last summer when prices were rising 6.5%. Food prices were up 10.5% in January.
The Chinese economy grew at an annual pace of 8.9% in the last three months of 2011.
China, the world's second largest economy behind the United States, has grown at an average annual rate of about 10% for the past 30 years.
A growing chorus of skeptics say China's economy is a bubble set to burst. They worry about massive over construction that has resulted in empty buildings and infrastructure projects of little value.
Most notable is short-seller Jim Chanos of Kynikos Associates. "We are seeing rapid falloffs in demand in things like construction equipment, railway construction over there, housing sales -- so lots of things are slowing down pretty quickly over there," Chanos said in an interview with CNNMoney this week.
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.50%||3.49%|
|15 yr fixed||2.65%||2.67%|
|30 yr refi||3.39%||3.46%|
|15 yr refi||2.67%||2.70%|
Today's featured rates:
|Latest Report||Next Update|
|Home prices||Aug 28|
|Consumer confidence||Aug 28|
|Manufacturing (ISM)||Sept 4|
|Inflation (CPI)||Sept 14|
|Retail sales||Sept 14|