MNI BRIEF: China State Banks Cut Deposit Rates

China’s six major state-owned banks announced reductions to their yuan deposit interest rates on Tuesday, state-media outlet People’s Daily reported.

Interest rates for fixed-term deposits of three and five years have been reduced by 25 basis points to 1.25% and 1.3%, the daily said. 

China's Loan Prime Rate was reduced by 10bp on Tuesday, in line with expectations following the People’s Bank of China’s recent cut to the 7-day reverse repo rate.

The People’s Bank of China is likely to prevent any sharp appreciation of the yuan from about 7.20 against the dollar in the near term as talks are expected with the U.S., so any coming strength in the greenback would see China’s exchange rate gain against other currencies, advisors and traders recently told MNI. (See MNI: Yuan Seen Strengthening Against Crosses)