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Interest rates offered by the banks would be capped at 4.3% for
dollar deposits of $50,000 and above, said the people, who
declined to be named as they were not authorised to speak to the
media.
The lowering of interest rates came into effect on Tuesday, they
said, adding the new rates the big banks can offer is set to be
lowered by as much as 100 basis points from the previous ceiling
of 5.3%.
The move could encourage Chinese companies, especially
exporters, to settle their foreign exchange receipts in China's
yuan, which has weakened to six-month lows against the dollar.
A buoyant dollar and the Federal Reserve's aggressive interest
rates hikes since last year have prompted many Chinese companies
to hoard dollar receipts.
The yuan has lost more than 6% against the dollar since highs
hit in January, when global markets embraced China's border
reopening, and is one of the worst performing Asian currencies
this year. It last traded at 7.1199 per dollar. [CNY/]
The move also came after the central bank said last month it
would resolutely curb large fluctuations in the exchange rate
and study the strengthening of self-regulation of dollar
deposits.
The People's Bank of China did not immediately respond to a
Reuters request for comment.
(Reporting by Beijing and Shanghai Newsroom; Editing by Sumeet
Chatterjee and Louise Heavens and Mark Potter)
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