China on Tuesday cut the market-based benchmark lending rate.

The one-year loan prime rate (LPR) came in at 3.55 percent Tuesday, down from the previous reading of 3.65 percent, according to the National Interbank Funding Center.

The over-five-year LPR, on which many lenders base their mortgage rates, was lowered by 10 basis points to 4.2 percent.

The monthly-released data is a pricing reference rate for banks and is based on rates of the People's Bank of China (PBOC)'s open market operations, especially the medium-term lending facility (MLF) rate.

The PBOC, the central bank, cut the interest rate of its one-year MLF from 2.75 percent to 2.65 percent on Thursday, amid efforts to strengthen counter-cyclical adjustment and stabilize market expectations.

Last Tuesday, the central bank lowered the seven-day reverse repo rate for the first time since last August from 2 percent to 1.9 percent.

Later the same day, it announced a cut on the interest rates of its standing lending facility, with the overnight rate down by 10 basis points to 2.75 percent.

Zeng Gang, director of the Shanghai Institution for Finance and Development, said the policy rate cuts led to this month's LPR cut, which will effectively drive down real loan interest rates, reduce financing costs, stimulate credit demand, and strengthen the growth momentum of consumption and investment.