China cut benchmark lending rates at a monthly fixing on Monday, after the central bank surprised the markets by lowering a key short-term policy rate earlier in the session.

The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.35 percent from 3.45 percent previously, while the five-year LPR was reduced by the same margin to 3.85 percent from 3.95 percent .

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. (Reuters)