Rumors that some Zhejiang banks lowered deposit rates sparked sizable
bond-market moves. Multiple sources confirmed the change is a regional
self-discipline adjustment: Zhejiang’s deposit-rate mechanism cut the
self-regulated caps on two-, three- and five-year deposits by 5bps, effective
July 22, applied only to city commercial banks and rural commercial banks in
Zhejiang. The move does not cover state-owned big banks or national joint-stock
banks and, according to local banking officials and economists, is not a signal
of a broader monetary policy rate cut.
