Will the interest rate on bank deposits decrease and the interest rate on loans decrease?
Although the bank deposit interest rate is not linked to the loan interest rate, the loan interest rate is likely to decrease after the deposit interest rate is lowered, because the reduction of the deposit interest rate will help the bank maintain the stability of the interest margin, and the reduction of the bank debt cost will help promote the steady reduction of the loan interest rate.
Deposit interest and loan interest are two main revenue and expenditure channels for banks. Banks want to make money, so the deposit interest rate will be lower than the loan interest rate. The deposit interest rate is lowered, the bank deposit cost is lowered, the loan interest rate is not lowered, and the bank loan profit is compressed, which has a negative impact on the bank's operation.
Banks usually decide whether to lower the loan interest rate according to market conditions and their own operating conditions. If the market competition is fierce, banks may lower the loan interest rate to attract customers. If the business situation is not good, the bank may also lower the loan interest rate to reduce the capital cost and risk.
There are advantages and disadvantages after lowering the bank deposit interest rate. The advantage is that it helps to reduce the financing cost of the whole real economy. In order to further maintain the relatively low interest rate on the loan side, LPR will be lowered after the bank deposit interest rate is generally lowered in history, that is to say, the loan interest rate will also be lowered, because the bank loan interest rate is increased and decreased based on LPR.
The above is the analysis and answer to the question whether the bank deposit interest rate will be reduced. I hope I can help you.