Banking Changes in China

BEIJING (Reuters) – On Tuesday, five major state-owned banks in China decided to lower their deposit rates. The Agricultural Bank of China, Construction Bank of China, and Bank of China have all adjusted their rates by 5 to 25 basis points in various terms, according to the information available on their mobile apps.

Specifically, the interest rates for hourly deposits decreased by 5 basis points to 0.05%. One-year deposits now see a reduction from 0.95% to 15 basis points, while three and five-year deposits dropped from 25 basis points.

This move is expected to influence smaller banks to consider similar reductions.

Sources indicated on Monday that prominent Chinese state banks were set to implement these deposit rate cuts starting Tuesday.

Earlier this month, Chinese authorities announced that Beijing will spearhead several stimulus initiatives, including interest rate reductions and substantial liquidity measures, aimed at mitigating the economic impact stemming from the trade conflict with the US.

Additionally, China plans to provide monthly updates to the Loan Prime Rate, which serves as a crucial benchmark for a majority of business and household loans.