The People's Bank of China (PBOC), the central bank, announced Thursday it would cut the benchmark interest rate for one-year deposits by 25 basis points beginning Friday.

The benchmark one-year lending rate will also be lowered by 31 basis points the same time, the PBOC said in a statement on its website.

It was the second time that China's central bank cut the benchmark rates this year after a 25-basis-point cut in interest rates in June.

The surprise rate cuts came at a time when many analysts fear the economic growth will slow further in the world's second-largest economy in the second quarter.

The PBOC said in the statement that it will allow banks to offer 30 percent discount to borrowers, larger than the previous 20 percent, but the lower limit of the floating band of mortgage loan interests will remain unchanged.

"Banking institutions should continue to strictly implement the differentiated housing loans policy and continue to curb speculative home purchases," the PBOC said in the statement.

After the latest cut, the one-year deposit interest rate will fall to 3 percent while that of the one-year loan interest rate will be lowered to 6 percent.

The upper limit of the floating band of deposit rates was previously adjusted to 1.1 times the benchmark.

China's gross domestic product slowed to a nearly three-year low of 8.1 percent in the first quarter and key economic indicators for June continue to suggest downward risks.

The National Bureau of Statistics has yet to release a string of economic data, including the GDP for the second quarter and the consumer price index, next week.