2022-04-26

Chinese Banks Cut Deposit Rates

Sina: 国有大行定期存款利率下调!专家:银行正在采取多种途径,全面降低存款成本
As the market interest rate pricing self-discipline mechanism encourages some small and medium-sized banks to lower the floating ceiling of deposit interest rates by about 10 basis points (BP), large state-owned banks have also joined in.   

Recently, the 2-year and 3-year ordinary time deposit interest rates of some large state-owned banks have been lowered. According to the mobile banking apps of various banks, the time deposit interest rates of ICBC, Bank of China and China Construction Bank have generally been lowered by 0.1 percentage points.

...At the same time, Wang Qing also pointed out that this phenomenon is also a manifestation of the improvement of the transmission efficiency of monetary policy.   

The reduction of deposit interest rates will help reduce the pressure on bank interest margins. There are two ways to adjust interest rates in the future.   

Recently, a major state-owned bank has lowered the interest rate of large-denomination certificates of deposit and time deposits. What benefits will this approach bring? Zeng Gang, deputy director of the National Finance and Development Laboratory and director of the Shanghai Finance and Development Laboratory, previously stated, "The drop in deposit interest rates, in terms of supporting the real economy and reducing the financing cost of the real economy, is actually a reduction in the loan side that banks can make profits. The space is opened up, and there is a further possibility of reducing the overall cost of the entity.”

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