Chinese state banks are cutting deposit rates today as previewed earlier:
So far we’ve had cuts announced from China Merchants Bank, China Construction Bank, ICBC, Bank of China.
More now, from Agricultural Bank of China, Bank of Communications, and Postal Savings Bank of China. All cutting yuan deposit rates. Chinese banks are under pressure to support economic growth amid a property crisis, weak loan demand and record low interest margins.
The cuts are on time deposits
- by 5 bps to 0.05%
- cuts on one-year time deposits by 15 bps to 0.95%
- 25 bp cuts on three- and five- year time deposits
As I said earlier:
The cuts are part of stimulus efforts from China. The People’s Bank of China cut its 7 day reverse repo benchmark rate by 10bp to 1.4% earlier this month. Governor Pan Gongsheng said a 10 basis point cut will lead to a reduction in the benchmark loan prime rate (LPR) of the same size.The monthly LPR fixing is due at 0100 GMT.
LPR cuts should help banks lower their funding costs.
This article was written by Eamonn Sheridan at www.forexlive.com.
