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Investing.com -- China has made a move to protect the profit margins of banks and discourage excessive savings by reducing the upper limits on deposit rates, according to Reuters.
The decision was made by the interest rate self-regulatory body under China’s central bank.
This action follows shortly after China’s recent reduction in benchmark lending rates and state banks’ lowering of their baseline deposit rates.
These decisions are part of a broader strategy to manage the economic challenges the country is currently facing.
China’s economy is under pressure due to several factors. Weak consumer spending, a protracted property crisis, and an ongoing trade war with the United States are all contributing to the strain on banks’ profitability.
By lowering the ceilings on deposit rates, the central bank aims to ensure that banks can maintain their profit margins despite these challenges.
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