China Urges Banks to Cut Interest Rates on Deposits to Boost Growth

Chinese authorities have called on the country's largest banks to cut interest rates on deposits for at least the second time in less than a year, informed sources said, indicating increased efforts to boost the world's second-largest economy.

The sources, who requested anonymity, added that last week, recommendations were issued to state-owned banks, including Bank of China Limited, Industrial and Commercial Bank of China Limited, and Bank of Communications, to reduce interest rates on a range of banking products, including demand deposits, by 5% basis points, and three- and five-year deposits by at least 10 basis points, according to Bloomberg News. The sources said the request was sent through the central bank's interest rate self-adjusting mechanism.

Major banks are currently offering an annual interest rate of 0.25% on demand deposits and an interest rate of 2.6% and 2.56%, respectively, on three- and five-year term deposits.