China's central bank on Thursday said it will allow commercial banks to set deposit rates as high as 110 percent of the benchmark rate and set rates on loans as low as 80 percent of the benchmark rate.

The move, which accompanied a central bank cut of both benchmark lending and deposit rates, marks the latest step to ease control on interest rates and stimulate bank lending.

The step takes effect on Friday.

(Reporting by Kevin Yao; Editing by Ed Lane)