Depositors' income decreases. When the deposit interest rate is lowered to 2.0%, depositors' income will correspondingly decrease. Previously, China's deposit interest rate was at a relatively high level, and depositors' income was also considerable. Entering the era of 2.0% means that depositors' investment income will face certain compression.
Bank funding costs decrease. The reduction of the deposit interest rate means that the funding costs of commercial banks will correspondingly decrease. Of course, other funding costs of banks also need to be considered, but the decrease in funding costs of deposits, as one of the main sources of bank funds, will to some extent alleviate the financial pressure on banks. This is also one of the main purposes of interest rate cuts.
Monetary environment is loose. The reduction of the deposit interest rate reflects that the current and future monetary environment will be relatively loose. The scale of social financing is expected to increase, and the money supply may rise accordingly. This also means that the future inflation pressure may increase to some extent.
Financial wealth management product returns decrease. With the decrease in deposit interest rates, the returns on bank wealth management products may also face certain downward pressure. At the same time, the returns on financial products such as money market funds and short-term wealth management will also be adjusted. This may weaken the attractiveness of these products to the public to some extent.
There is pressure on economic growth. The decrease in deposit interest rates to a low level also means that the real economy may have difficulty obtaining sufficient financial support, and economic growth may face various pressures. If the monetary policy effect is not significant, it will increase the risk of economic downturn.
In summary, the decrease in deposit interest rates to the era of 2.0% means a loose monetary environment, but it also implies increased pressure on economic growth and decreased benefits for banks and the public. This requires close attention to the macroeconomic and financial operation situation and prevention of related risks. At the same time, financial reforms need to be carried out to further relax interest rate controls, allowing interest rates to be freely priced based on market supply and demand, in order to better play the macroeconomic regulation role of interest rates.