Major Chinese Banks Announce Rate Cuts Amid Economic Struggles

Several major Chinese banks, including ICBC and AgBank, have announced cuts to time deposit rates following China’s reduction of benchmark lending rates. The move aims to support economic growth amid property crises and weak loan demand by lowering funding costs for banks facing record low interest margins.

Several major Chinese banks, including the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (AgBank), announced on Thursday that they would be cutting rates on time deposits. This move comes just days after China reduced its benchmark lending rates.

According to statements on their respective websites, ICBC, AgBank, and the Bank of China will lower time deposit rates by 10-20 basis points. More banks in China are expected to follow suit. The unexpected reduction in key short-term and long-term interest rates is seen as an effort to stimulate growth in a sluggish economy. The benchmark lending rates were cut by 10 basis points earlier this week.

The reduction in deposit rates aims to reduce funding costs for banks that are currently under pressure to bolster economic growth. This pressure is exacerbated by ongoing issues such as a property market crisis, weak demand for loans, and historically low interest margins.

(With inputs from agencies.)