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The expected warming of the december interest rate decline in the federal reserve has led to a further decline in interest rates on future dollar deposits. Financial institutions are rushing “windows” to increase their efforts to market united states dollar deposit products, with banks recently introducing multi-dollar deposit products at an interest rate of around 3 per cent. At the same time, the dollar is relatively warm。
In an interview with the china business newspaper, it became clear from the trend that the future fed's interest-rate route was largely established, with interest rates falling in 2026 or on a continuous basis, so that, overall, interest rates on future dollar deposits were declining。
United states dollar deposit marketing is warming
Banking institutions have recently focused on disseminating information on dollar deposit products。
For example, on 1 december, the shanghai branch of jiangsu bank issued a bulletin stating that the interest rate on united states dollar deposits for the three-month, six-month and one-year periods, respectively, was 2. 50 per cent, 2. 70 per cent and 3. 00 per cent, all starting amounts being $5,000. For example, the taiwon branch of bank suhai has recently issued a bulletin stating: “the `dollar deposit' of heavy pounds strikes, multiple durations, online processing, low threshold of deposit and security of interest.” the bank issues $4. 0 million in start-up products with a united states dollar deposit interest rate of 2. 50 per cent, 2. 65 per cent, 2. 75 per cent and 3. 10 per cent for one month, three months, six months and one year, respectively。
Meanwhile, a number of foreign banks increased their marketing of dollar deposit products in november. For example, on 28 november, the bank of china issued a “recommendant for thermal sale of personal products”, which includes deposits in united states dollars for one month, three months, six months, one year and two years at an annual interest rate of 3. 25 per cent, 3. 35 per cent, 3. 40 per cent, 2. 0 per cent and 1. 00 per cent, respectively。
According to journalists, the downward trend in the interest rate on dollar deposits has been a major trend in north china, with a window period in which most of the dollar-deposit products of a one-year period are in the range of 3 per cent per year, although the interest rates set by different banks for dollar deposits may vary considerably, but overall it is a sound financial choice for customers。
At the same time, united states dollar finance has increased in the near future. For example, according to a recent letter from the minister of foreign affairs of china, the current market’s expectations of the federal reserve’s december interest rate decline, the recent intensive release of pigeon signals by a number of federal reserve officials, and the clear orientation of the medium- and long-term interest-rate reduction route, are the golden window period for dollar-based finance. Now it is equal to locking up the current attractive yield opportunities ahead of schedule in a window where interest rates are relatively high. As a class of assets less relevant to local assets, united states dollar assets can effectively spread the systemic risks associated with a single currency, a single economy, and increase the overall resilience and long-term robustness of the asset portfolio。
Future interest rate or continue down
According to yang haiping, a special agent of the beijing association of wealth management industries, the most important factor influencing the interest rate on dollar deposits of domestic commercial banks is the federal reserve's monetary policy. The federal reserve experienced a decline in interest rates in december, with a higher market probability and a further decline in interest rates on dollar deposits。
On the news, according to cme, the fed's probability of lowering interest rates by 25 basis points in december had risen to 89. 2 per cent by 0700 beijing time. In a recently released report, us bank global studies predicted that the fed would reduce interest rates by 25 basis points at its december meeting, on the grounds that the united states labour market was weak and that recent statements by policymakers suggested that interest rates would be cut early。
In addition, the federal reserve is expected to reduce interest rates by an additional 25 basis points in june and july 2026, respectively, eventually reducing terminal interest rates to 3. 00 to 3. 25 per cent。
According to yang haiping, as far as the fed’s interest-rate route is concerned, it is likely that the downward trend will continue in 2026 and that interest rates on domestic commercial banks’ dollar deposits will continue to decline. However, different types of commercial banks vary in their rhythm。
