China banks to cut rates on mortgages and deposits in stimulus to economy
China's state banks are throwing nearly all they have at seeking to boost consumer spending, directed by policymakers who are digging deeper into their toolkit to shore up growth in the world's second-largest economy.
As soon as Tuesday, China may announce that the big state-owned banks are cutting rates on the majority of the nation's 38.6 trillion yuan ($5.3 trillion) of existing mortgages, according to people familiar with the matter. The reductions will only affect loans on first homes, according to two of the people.
At the same time, lenders such as Industrial & Commercial Bank of China Ltd.
and China Construction Bank Corp. are poised to later this week cut deposit rates for a third time in a year to shore up their plunging margins.
The move would be the latest piecemeal step rolled out by Beijing as authorities try to spur consumer spending, drive more funds into the stock market and alleviate pressure on lenders.
The People's Bank of China didn't immediately respond to a request seeking a comment.
The mortgage cuts, highly anticipated by the market after the central bank hinted at support in mid-July, comes as Beijing is struggling to reboot economic growth as borrowing demand slumps, deflation pressure takes hold and confidence tanks.
