BEIJING -- China's Ministry of Finance announced on Friday the cancellation of a bond issue worth up to 40 billion yuan ($6.30 billion), following surprise rate cuts amid the economic downturn.

The ministry said it had decided not to release two batches of electronic savings bonds - the seventh and eighth of their kind this year - which were scheduled to be issued from July 10, because the People's Bank of China cut benchmark interest rates from Friday.

"The issuance will be canceled or suspended if interest rate adjustments occur before the issuance," the ministry had said when announcing the bond issue on July 2.

The PBOC, the country's central bank, announced late on Thursday that it will reduce the benchmark interest rate for one-year deposits by 25 basis points and that of one-year lending by 31 basis points on Friday.

The move came less than a month after the previous rate cuts announced on June 7, when the benchmark rates were slashed by 25 basis points in their first cuts since December 2008.