China's central bank has lowered its key interest rate in what is seen as a bid to support the economy amid clear signs of a faltering recovery.

The People's Bank of China announced a 0.1 percentage-point reduction in the 1-year loan prime rate to 3.45 percent.

Financial institutions use it as a benchmark for corporate loans. The PBOC also cut the rate in June.

Prolonged weakness in China's real-estate market is prompting concern about the financial health of related businesses. Exports are also down sharply.

Meanwhile, the consumer price index for July logged its first year-on-year decline since February 2021. That is fueling concerns about deflation.

Monday's further monetary easing is seen as a way for the central bank to boost corporate lending and inject more funds into the real-estate market to bolster the economy.