BEIJING - The People's Bank of China (PBOC), China's central bank Friday cut the benchmark interest rate for one-year deposits by 25 basis points and the one-year lending rate by 40 basis points from Saturday.

This is the first adjustment to the benchmark rates since July 2012.

After the cut, one-year deposit rate will stand at 2.75 percent, while one-year lending will be at 5.6 percent, according to the central bank website.

The move comes as the economy is under pressure with GDP expanding by 7.3 percent year on year in Q3, compared with 7.5 percent in Q2 and 7.4 percent in Q1.

Q3 growth was the slowest quarterly growth since Q1, 2009.

The PBOC also lifted the upper limit of the floating band of deposit rates to 1.2 times the benchmark from the existing 1.1 times announced in June 2012, a big step in interest rate reform. Until June 2012, China's commercial banks were generally not allowed to offer deposits rates higher than the benchmark.

"The Chinese economy is running within the proper range and positive signs have emerged in economic restructuring. However, high financing costs and financing difficulty still remain a prominent problem for the real economy," the central bank said in a separate statement after announcing the interest rate cut.

"To reduce high financing costs for enterprises, small and micro-firms in particular, is of great importance to stabilizing economic growth, job creation and the benefit of the people," noted the statement.