SHANGHAI/BEIJING (Reuters) – A Chinese self-regulatory body overseen by the central bank has asked major state-owned banks to lower the dollar deposit interest rates, four people with direct knowledge of the matter said on Tuesday, in the latest move to shore up the weakening yuan currency.
Interest rates offered by the banks would be capped at 4.3% for dollar deposits of $50,000 and above, said the people, who declined to be named as they were not authorised to speak to the media.
The lowering of interest rates came into effect on Tuesday, they said, adding the new rates the big banks can offer is set to be lowered by as much as 100 basis points from the previous ceiling of 5.3%.
The move could encourage Chinese companies, especially exporters, to settle their foreign exchange receipts into Chinese yuan, which has weakened to six-month lows against the dollar.
The People’s Bank of China did not immediately respond to Reuters request for comments.
(Reporting by Beijing and Shanghai Newsroom; Editing by Sumeet Chatterjee and Louise Heavens)
