7th June 2023 – (Beijing) Several major state-owned banks in China are set to lower their yuan deposit rates from Thursday, according to a report by state media Securities Times. The move is expected to provide more room for lower lending costs, which could help stimulate the country’s struggling economy.
The interest rates on demand deposits are expected to be cut by 5 basis points to 0.2%, while the rates on three-year and five-year time deposits will be lowered by 15 basis points to 2.45% and 2.5%, respectively. However, the report did not name specific banks.
Sources with direct knowledge of the matter revealed that a Chinese self-regulatory body, overseen by the central bank, had asked major state-owned banks to lower the dollar deposit interest rates on Tuesday.
According to a note from Citigroup analysts, including Judy Zhang, the Chinese government is taking note of the rapid weakening of market confidence and is urgently trying to help China’s banks stabilize net interest margin (NIM) while maintaining lending capacity to support the real economy.