China's central bank, the People's Bank of China, is refuting claims that a recent interest cut is the country's version of a quantitative easing policy.

File photo of China's central bank, the People's Bank of of China. [Photo: Baidu]

Researcher Lu Lei from the central bank also rejects the idea that the move is a form of economic stimulus.

"Interest rate cut serves as a traditional monetary policy tool. Using the tool means our overall policy is still workable. The outcome of this policy is clear: lowering the financing cost and improving the financial situation of the real economy. As for the saying of Chinese version of quantitative easing, it does not fit the real situation in China, for recent monetary policy in China does not fail to become ineffective."

China's central bank began cutting the one-year deposit rate by 25 basis points on Monday.

The one-year lending rate is being set at 5.1-percent.

This is the third rate cut by the central bank since last November.

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