The deposit rate has been a better guide to the policy stance than the refi rate has.
In October, the PBOC raised the benchmark one-year deposit rate to 2.5%, the first hike since December 2007.
The deposit rate is already at zero, making savings account worthless after inflation.
That was on the deposit rate, the rate put on money left by commercial banks at the central bank, which it normally earns interest on.
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On the other hand, too lax policy, such as keeping the real deposit rate deeply negative, could fuel asset price bubbles that, by definition, eventually burst.
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The benchmark lending rate was reduced by 0.25 percentage point late Thursday to 6.31% and the benchmark deposit rate to 3.25%, the first cut in borrowing costs since December 2008.
The most the ECB has done to try and encourage more lending is cut its overnight deposit rate, in other words paying less interest on money it borrows from banks overnight.
Denmark cut its deposit rate below zero in July last year, and in December, the Swiss bank Credit Suisse imposed negative rates on bank deposits to tame demand for the Swiss franc.
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The central government has gradually been giving financial institutions more freedom to set interest rates, but the major remaining hurdle allowing banks to determine what deposit rate to offer customers could well be the most difficult.
Joerg Kraemer, chief economist at Commerzbank -- Germany's second-largest bank -- would expect the ECB to cut the deposit rate to negative territory before putting in place any other non-standard measures such as a loan scheme for small businesses.
On Thursday, the European Central Bank cut its official deposit rate for overnight lending to the central bank by 50 basis points, to 1.0%, below its 2.5% benchmark rate, in an attempt to wean banks off the safety of its vaults and thus stimulate interbank lending.
The Philippines, whose sovereign credit rating was upgraded to investment grade by two rating firms over the past two months, has been fighting the so-called hot-money inflows with several measures, including making it easier for locals to take money abroad and lowering a deposit rate for banks that do cross-border business.
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The Philippines, whose sovereign credit rating was upgraded to investment grade by two ratings firms over the past two months, has been fighting the so-called hot-money inflows with several measures, including making it easier for locals to take money abroad and lowering a deposit rate for banks that do cross-border business.
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It is the refinancing rate that usually dictates average money market interest rates with the deposit facility rate acting as a lower floor.
For borrowers who can only put down a 10% deposit the average rate is higher at 6.06%.
In a perfect credit market, the spread between these two rates, the deposit and the loan rate, would be wafer thin.
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However, when central banks pay interest on reserves or a deposit facility, this interest rate is rarely the one used to set the target for short-term private sector borrowing rates.
He said the ECB was "technically ready" to take the interest rate on its deposit facility into negative territory - in other words, to charge banks to park their cash with the central bank.
With this rate of growth, the Deposit Insurance Fund would have to be huge by the end of September 2020.
There are now 80 different mortgages available for those offering a 5% deposit, including just 56 fixed-rate deals, down from 1, 079 in July last year.
But in China, where most savings are in the form of bank deposits and where earnings on savings are a significant portion of total household earnings, lowering deposit rates tends to increase the savings rate.
More significant may have been policies aimed at keeping corporate borrowing rates low to slow the growth rate of nonperforming loans, and deposit rates even lower to ensure bank profitability.
China announced its interest rate cut for both interbank lending and deposit rates to 6.31% and 3.25%, respectively, effective Friday.
Eurodollar futures and options, where investors hedged or speculated on the interest rate paid on a 90-day deposit of a dollar overseas, were half of the Merc's business, with 1.5 million contracts traded per day.
Borrowers can lower their interest rate by asking lenders to purchase certificates of deposit against their loan for rates of 4.25% or below, and credit unions guarantee the CDs.
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Over the past four years he has used E-Trade's once-roaring stock to acquire ever more services, offering the nation's top-yielding certificates of deposit, an asset management arm and a cut-rate version of the "wrap" accounts invented by old-line brokers.
According to the financial information service Moneyfacts, the average cost of a two-year fixed-rate loan, for someone with a 25% deposit, is currently 4.28%.
However, customers who need to borrow less than 75% by putting down a bigger deposit are being offered cheaper deals on tracker and fixed-rate mortgages.
Over the past four years he has used E-Trade's once-roaring stock to acquire ever more services, offering the nation's top-yielding certificates of deposit, an asset-management arm and a cut-rate version of the "wrap" accounts invented by old-line brokers.
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