Major Chinese banks cut deposits rates, paving the way for mortgage rate cuts
China's biggest banks on Friday cut interest rates on a range of deposits in an effort to ease pressure on their shrinking margins as lenders move to lower mortgage rates to prop up a struggling property sector and a faltering economy.
The banks, including Industrial and Commercial Bank of China and Agricultural Bank of China on Friday cut their deposit rates by between five and 25 basis points, websites from each bank showed.
Three sources familiar with the matter told Reuters on Tuesday that major state banks would cut deposit rates as they prepare to lower interest rates on existing mortgages, part of Beijing's efforts to revive the debt crisis-hit property sector.
Starting from Sept.
25, first-time home buyers with mortgages can apply to their banks for a lower interest rate on their existing loans, China's central bank and financial regulator announced on Thursday.
Two of China's biggest cities, Guangzhou and Shenzhen, also eased mortgage curbs this week, broadening the definition for home buyers to enjoy preferential loans for first-home purchases.
The moves come as embattled developer Country Garden delays a deadline for creditors to vote on whether to postpone payments for an onshore private bond, according to a document seen by Reuters.
The vote on the 3.9 billion yuan ($535 million) onshore private bond, now set for Friday afternoon, is a key hurdle Country Garden will have to overcome as it strives to avoid default amid a spiralling financing crisis and opposition from some creditors.
The company's mounting woes are the latest to hit the property sector and have sparked fears of financial system contagion at a time when the country is already struggling with a broader economic slowdown.
Country Garden, China's
