Multiple banks collectively cut deposit product interest rates

Recently, several small and medium-sized banks have lowered their deposit product interest rates, with some banks even experiencing an inverted yield curve where long-term deposit rates are lower than short- and medium-term rates.

Since March of this year, many small and medium-sized banks, including Liaoning Zhenxing Bank, Heilongjiang Youyi Rural Commercial Bank, and Shanghai Songjiang Fuming Village Bank, have reduced deposit interest rates. These adjustments include savings accounts and fixed-term deposit products of various durations.

It is noteworthy that after these adjustments, some small and medium-sized banks have shown an inverted interest rate curve between short- and long-term deposits. For example, Heilongjiang Youyi Rural Commercial Bank’s latest five-year fixed deposit rate is 1.6%, which is lower than its three-year fixed deposit rate of 1.75%. I also noticed that before this wave of rate cuts among small and medium banks, some large banks, including China Construction Bank, also had deposit products with inverted interest rates.

Experts analyze that the recent rate cuts by small and medium-sized banks are a strategy to stabilize net interest margins under the current moderately loose monetary policy. The inverted deposit rates reflect a form of precise liability management by banks.

Source: CCTV Finance

Origin: China Financial News