Chinese authorities asked the nation’s biggest banks to lower their deposit rates for at least the second time in less than a year, according to people familiar with the matter, marking an escalated effort to boost the world’s second-largest economy, reports Bloomberg.
State-owned lenders including Bank of China, Industrial & Commercial Bank of China and Bank of Communications were last week advised to cut rates on a range of products, including on demand deposits by 5 basis points and three-year and five-year time deposits by at least 10 basis points, said the people, who asked not to be identified. The request was communicated through the central bank’s interest rate self-disciplinary mechanism, the people said.
Banks are assessing the request and may adjust rates as early as this week, said the people, adding that the move isn’t mandatory. Big lenders currently offer an annualized rate of 0.25% demand deposits, and 2.6% and 2.65%, respectively, on three-year, five-year time deposits.