China asks top banks to cut deposit rates

Chinese officials have asked the country’s largest banks to cut deposit rates for the second time in nearly a year, sources told Bloomberg.

Accordingly, last week, among them Bank of China Ltd., Industrial & Commercial Bank of China Ltd. and the Bank of Communications Co. were asked to reduce interest rates on many of their products.

Banks were asked to reduce interest rates on deposits by 5 basis points, and on deposits with 3-5 years maturity by 10 basis points.

Sources stated that banks are evaluating the demand and may adjust interest rates this week at the earliest.

China’s largest banks pay 0.25% annual interest on deposits, and 2.6 percent and 2.65 percent on deposits with three and five years maturity, respectively.

The People’s Bank of China did not comment on the matter.