China's top banks on Friday cut interest rates on deposits in yuan for the second time this year, state media said, as Beijing seeks to boost sluggish consumption.

The one-year fixed-term deposit interest rate was cut by 25 basis points to 1.1 percent, according to the official deposit interest rates released by Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China and Bank of Communications.

This was the second deposit interest rate cut for state-owned big banks in 2024, with the previous cut implemented in July.

Meanwhile, China's central bank and financial regulators have held meetings with key financial institutions, urging them to swiftly implement expansive policies to support the economy and the capital markets.

The People's Bank of China (PBOC) said in a statement on its website on Friday that it urged participants to boost credit support for the real economy, and maintain reasonable growth in the total amount of money and credit.

It also urged solid implementation of interest rate adjustments, as well as two funding schemes created to support the stock market.

China's banking and securities regulators also chaired the meeting, and participants included banks, brokerages and fund companies.

Also on Friday, the governor of China's central bank, Pan Gongsheng, warned against any illegal fund flows into the stock market, state media said, following recent measures to support domestic capital markets.

The PBOC introduced two new tools in September to support markets.

These were a swap programme giving funds, insurers and brokers easier access to funding for stock buys, and relatively cheap PBOC loans to help banks finance listed companies' share purchases and buybacks.

Speaking at a financial forum in Beijing, Pan said the two measures were based entirely on market-oriented principles, and the swap facility was not a form of direct financial support from the central bank.

The bank's provisions regarding stock buybacks and purchases have specific directional aims, and the fundamental bottom line was that loan funds must not unlawfully enter the stock market, Pan added. (Xinhua/Agencies)
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Last updated: 2024-10-18 HKT 11:10