China’s six largest state-owned banks cut deposit rates

 

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China’s six largest state-owned banks including Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China, Postal Savings Bank of China and Bank of Communications on Thursday cut the interest rates on some deposit products

The rate on current deposit is lowered to 0.2% from previous 0.25%, the rate on 2-year term deposit cut by 10 basis points to 2.05%, the rate on 3-year term deposit cut by 15 basis points to 2.45%, the rate on 5-year term deposit cut by 15 basis points to 2.5%.

China’s economy rebounded faster than expected in the first quarter but lost momentum at the beginning of the second, grappling with tumbling exports, a sluggish housing market and a high unemployment ratio.

Major state banks’ net interest margins have shrunk following pressure to lower borrowing cost for individuals and businesses to stimulate the economy, and as credit demand remains subdued.