FX.co ★ China’s Big Banks Slash Deposit Rates

On Tuesday, four major state-owned banks in China made the decision to reduce their deposit interest rates. This move is aimed at alleviating the pressure from shrinking interest margins, coinciding with Beijing's efforts to implement more aggressive monetary easing strategies to bolster the slowing economy. The banks in question—Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, and Bank of China—have decreased rates by 5 to 25 basis points across different deposit terms according to Reuters. Specifically, time deposits experienced a reduction of 5 basis points down to 0.05%, one-year deposits saw a 15 basis point decrease to 0.95%, and three- and five-year deposits were lowered by 25 basis points. These changes are anticipated to prompt smaller banks to follow a similar course. This strategic adjustment aligns with the broader set of stimulus measures Chinese authorities have initiated, which include interest rate cuts and substantial liquidity infusions, all aimed at mitigating the economic impact stemming from the ongoing trade tensions with the United States.