China’s rate on new loans fell in first half, banks’ move to cut deposit rates to create room for lowering corporate loan rates – PBOC official
POLICY & REGULATION
China’s rate on new loans fell in first half, banks’ move to cut deposit rates to create room for lowering corporate loan rates – PBOC official
POLICY & REGULATION

China’s rate on new loans fell in first half, banks’ move to cut deposit rates to create room for lowering corporate loan rates – PBOC official

 

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The People’s Bank of China (PBOC) has been pushing for declines in the real economy’s financing costs and the weighted average interest rates on the newly extended corporate loans in the first half of the year stood at 3.96%, falling by 25 basis points from a year earlier, said Liu Guoqiang, deputy governor of the central bank, at a news conference on Friday. 

The weighted average interest rate on the newly extended home mortgage loans during the period stood at 4.18%, down 107 basis points from a year earlier, he said.

China’s state-owned commercial banks and joint-stock banks have recently lowered the interest rates on deposits based on market changes and interest rate trend, and after the cuts, the weighted average rate on current deposits fell to 0.23% in June, down by 0.09 percentage point from a year earlier, while the weighted average rates on time deposits fell to 2.22%, down 0.12 percentage points, said Zou Lan, head of the monetary policy department of the PBOC.

The drop in deposit rates will help banks lower funding cost, which will create conditions for lowering the interest rates on corporate loans and strengthen banks’ capability in supporting the real economy, said Zou.