Interest rate adjusted for real economy

ON SATURDAY EVENING, the People's Bank of China announced it was "asymmetrically" adjusting downward the benchmark interest rates of domestic financial institutions for RMB savings and loans, and allowing the institutions greater freedom in floating deposit interest rates upward. Being the second adjustment within three months, the move aroused much discussion. Comments:

Facing the pressure of attracting depositors, domestic banks will not dare to cut deposit rates even with lower benchmarks; on the contrary, many will possibly float deposit rates to the upper limit. That was what happened last November when the central bank cut interest rates and the conditions this time are similar.

Dong Dengxin, a researcher on finance and securities at Wuhan University of Science and Technology, March 1