China rate liberalisation unlikely to trigger deposit war
With one-year lending rates now set at 4.35%, banks are unwilling to go much higher
Shanghai
CHINA'S landmark decision to scrap a long-standing ceiling on bank deposit rates is unlikely to have much impact on the real economy - or help credit-starved smaller firms - as lenders focus on protecting margins rather than competing for new funds.
The weekend move freed up China's interest-rate market, allowing lenders to competitively price deposits to attract more funds at a time when more and more retail investors are choosing to put their savings into more lucrative online financial wealth management products (WMPs).
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