Interbank Deposit Rate Self-Discipline Management "Patches" Over 10 Trillion Yuan in Funds May Face Repricing

Interbank deposit rate self-regulation “patch” may face re-pricing of over 10 trillion yuan in funds. On March 17, Caixin reported that self-regulation of interbank deposit rates is being further strengthened. According to multiple banking industry insiders, some member banks were recently asked to strengthen management of interbank demand deposit rates during meetings related to the market interest rate self-regulation mechanism. Under the latest requirements, the scale of interbank demand deposits with a maturity of more than 7 days, which exceeds the policy rate of reverse repurchase (OMO) by 1.4%, should generally not account for more than 10% to 20% at the end of the quarter. Industry experts estimate that as self-regulation is further reinforced, approximately 10 trillion yuan of bank interbank deposit rates could be affected and may face re-pricing. This round of self-regulation upgrade is seen as a continuation and strengthening of measures at the end of 2024, also indicating that the policy rate system centered on open market operation rates is gradually increasing its influence on bank liability pricing. (Shanghai Securities News)