International News 21 May 2025
-
China's Five Largest State-Owned Banks Cut Deposit Rates
In response to the country's efforts to bolster its economy through monetary easing measures, China's five largest state-owned banks have reduced deposit rates. Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China, China Construction Bank, Bank of China, and China Bank of Communications have reduced deposit rates by 5 to 25 basis points for various tenors. This strategic decision forms part of a broader plan to address the ongoing challenge of diminishing interest margins in the context of prevailing economic conditions. The deposit rate cuts were implemented following the government's announcement of stimulus measures, including interest rate cuts and liquidity injections, to mitigate the economic downturn's impact. It is anticipated that these reductions will encourage smaller lenders to adopt similar practices. In response to the government's initiatives to bolster the economy, China's major state-owned banks have initiated a reduction in deposit rates.
https://internasional.kontan.co.id/news/lima-bank-bumn-terbesar-china-ini-pangkas-bunga-deposito
Williams: US assets still favoured, Fed not rushing to cut rates
Fed Bank of New York President John Williams addressed concerns over investors leaving US assets due to government policies and economic uncertainty, stating that there hasn't been a major shift in investor behaviour. Williams emphasised that the Fed's current monetary policy is appropriate and advised against hasty interest rate decisions. While acknowledging some pricing effects in the Treasury bond market, Williams reassured investors that the US remains an attractive investment option for investors in various asset classes. He went on to explain that core fixed income markets, such as Treasuries, are performing well despite external challenges. Trump's call for interest rate cuts was met with a cautious response from Williams, who emphasised that the Fed is taking a methodical approach to evaluate the situation before making any decisions, with a focus on maintaining stability in the market despite the current uncertainties.
Spot gold prices could bounce back, triggered by Trump's poor record
The global spot gold price has increased due to rising concerns over the US credit rating downgrade and geopolitical tensions, prompting investors to seek gold as a means of safeguarding their assets. On Monday, the world spot gold price reached US$3,235 per troy ounce, representing a daily increase of 0.82%. The US credit rating was downgraded by Moody's Rating, citing concerns over high government debt and excessive fiscal spending, leading to apprehensions about an economic "debt time bomb". Geopolitical tensions, including Israel's military operation in the Gaza Strip and North Korea's war alert order, have also contributed to the rise in gold prices. Consequently, investor interest in safe-haven assets such as gold has increased.