SHANGHAI/BEIJING (Reuters) -A Chinese self-regulatory body overseen by the central bank has told major state-owned banks to lower dollar deposit interest rates, four people with direct knowledge of the matter said on Tuesday, in the latest move to shore up the yuan currency.
Interest rates offered by the banks would be capped at 4.3% for dollar deposits of $50,000 and above, said the people, who declined to be named as they were not authorised to speak to the media.
The lowering of interest rates came into effect on Tuesday, they said, adding the new rates the big banks can offer is set to be lowered by as much as 100 basis points from the previous ceiling of 5.3%.
The move could encourage Chinese companies, especially exporters, to settle their foreign exchange receipts in China's yuan, which has weakened to six-month lows against the dollar.
A buoyant dollar and the Federal Reserve's aggressive interest rates hikes since last year have prompted many Chinese companies to hoard dollar receipts.
The yuan has lost more than 6% against the dollar since highs hit in January, when global markets embraced China's border reopening, and is one of the worst performing Asian currencies this year. It last traded at 7.1199 per dollar. [CNY/]
The move also came after the central bank said last month it would resolutely curb large fluctuations in the exchange rate and study the strengthening of self-regulation of dollar deposits.
The People's Bank of China did not immediately respond to a Reuters request for comment.
(Reporting by Beijing and Shanghai Newsroom; Editing by Sumeet Chatterjee and Louise Heavens and Mark Potter)
