This interest rate cut on deposits was within market expectations.

Recently, the central bank has implemented a new round of reserve requirement ratio cuts and interest rate cuts. On May 8th, the 7-day reverse repo operation rate in the open market was adjusted from 1.50% to 1.40%, opening up the downward space for interest rates. Pan Gongsheng, governor of the People’s Bank of China, said at a press conference on May 7 that through the market-based interest rate transmission, it is expected to drive the Loan prime rate (LPR) down by 0.1 percentage point accordingly. Meanwhile, commercial banks will also be guided to lower deposit interest rates accordingly through the interest rate self-discipline mechanism.

Last year, major commercial banks carried out two rounds of cuts in RMB deposit interest rates.