(Bloomberg) — China’s four big state lenders have effectively cut dollar deposit rates, according to people familiar with the matter, at a time when strong demand for the US currency in the banking system helped push the yuan to a six-month low.
The banks have recently lowered the ceiling on the rates — which are a spread over the US Secured Overnight Financing Rate — for both companies and individuals, said the people who requested anonymity discussing private matters. Some of the lenders’ provincial branches now offer around 5.7% on dollar deposits to their biggest clients, down from 6% previously, one of the people said.
The four lenders, namely Industrial & Commercial Bank of China Ltd., Bank of China Ltd., Agricultural Bank of China Ltd. and China Construction Bank Corp., didn’t immediately respond to requests for comment. The news was earlier reported by the Securities Times.
The yuan has dropped 3% against the dollar this year, as the rates differential widened with the Federal Reserve tightening and China keeping policy accommodative. The deposit rate cut, while limited in scope, indicates Chinese policymakers are seeking to manage the scale of its currency’s decline.
