Forex rates unmoved despite measures
Print Edition
THE interest rates of foreign currencies have remained stable in Shanghai for the first two weeks since China floated the rates for banks in the city, the Shanghai headquarters of the People’s Bank of China said in a statement yesterday.
The average nominal demand deposit rate for US dollar was 0.05 percent and the three-month or shorter terms rate was 0.2 percent in major Chinese commercial banks in Shanghai last Friday. It was the same before the new measures were announced, the statement said. The average actual rates banks offered to clients were 0.05 percent for demand deposit and 0.39 percent for three-month or shorter terms, both lower than the previous ceiling.
“The foreign exchange market has been stable since the policy was implemented,” the statement said. “Depositors are calm about the new policy. There has been no cross-region and cross-bank move of deposit, and there is neither obvious change in deposit and withdrawal of foreign currencies.”
On June 27, China’s central bank liberalized interest rates on small foreign-currency deposit across Shanghai in the first pilot free trade zone reform to be applied outside the area. Interest rate ceilings on foreign-currency deposits of less than US$3 million will be removed after a 4-month trial in the zone, the central bank said.
Outside Shanghai, commercial banks still subject to interest rate ceiling of 3 percent on one-year US dollar deposit, 1.15 percent on demand deposit, and 2.75 percent for three-month or shorter terms. The rates were implemented in May 2005.
Interest rates for foreign currency deposit larger than US$3 million were liberated in 2011.
Total foreign currency deposits in Shanghai amounted to US$17.7 billion by the end of July 10 — US$900 million more than the end of June.
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