Chinese State Banks Lower Interest Rate Cap on Dollar Deposits
A self-regulatory body overseen by China’s central bank told the country’s state-owned banks to lower dollar deposit interest rates, Reuters reported on June 6. The purpose of lowering the interest rates is to encourage Chinese firms, particularly exporters, to settle foreign exchange in yuan instead of dollars.
China’s state-owned banks are now capping interest rates for dollar deposits of $50,000 or more at 4.3 percent, compared to its previous ceiling of 5.3 percent.
By putting a cap on dollar-based deposits, China is reducing the amount of dollars that its banks hold, which could help increase the demand for yuan and support its value.
The Trumpet said: “The dollar is facing several threats, any one of which could prove fatal to an already ailing currency,” we wrote in our April issue. “Americans should recognize that their economic system and the corresponding prosperity could collapse almost overnight.”
America’s reckless management of its national debt and its impulsive spending are causing many nations dependent on the dollar as a reserve currency to worry. Some are seeking to move away from a dollar-dominated global economy. Nations such as China want to make their currency look like a better alternative.
Learn more: Read “Uniting Against the Dollar.”