China's major state-owned banks cut deposit rates

China’s largest state-owned banks have cut yuan-denominated deposit rates in an effort to provide some relief for the financial sector and the broader economy. Some of China’s biggest banks have slashed interest rates on a range of deposit products in response to the government’s call for help to boost growth in the world’s second-largest economy. The Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China, Bank of China and China Construction Bank cut three- and five-year deposit rates by 15 basis points, and annualized interest rates for demand deposits by 5 basis points, according to their websites. The changes, which come into effect on Thursday, will also see two-year deposit rates cut by 10 basis points. The move comes after Chinese authorities earlier this month called on the country’s biggest banks to cut deposit rates for at least the second time in less than a year. The change will help ease deteriorating margins as banks are also encouraged to provide cheap loans to small businesses and home buyers. China’s economic recovery lost momentum in April. Chinese exports fell for the first time in three months in May, raising risks to the economy as global demand weakens. Economists polled by Bloomberg expect gross domestic product to rise 5.5% this year, slightly below the previous estimate of 5.6%. Growth in home sales also slowed in May after a brief recovery.