China May Cut Deposit Rates So Battered Banks Can Keep Lending

China’s battered banks are being asked to sacrifice profits to help millions of cash-squeezed companies struggling under the weight of the coronavirus outbreak, Bloomberg News reported. Now they may finally see some relief for themselves. Liu Guoqiang, a deputy governor of the People’s Bank of China, said over the weekend that policy makers are considering lowering their benchmark deposit rate for the first time in five years. A growing number of analysts are counting the days until such a reduction, with banks desperate for long-term incentives to keep doling out cheaper credit to support businesses as large parts of the economy remain idled. The new benchmark for corporate loans has been cut three times in the past six months, but the PBOC has stopped short of the bolder move of cutting the deposit rate out of concern for the impact on savers. Read more