China rates relaxation to drive structured products issuance

Lower deposit rates will force investors to take more risk

China stocks

The gradual trend towards interest rate liberalisation in China – which includes an anticipated clampdown on deposits that offer returns significantly above the market rate – will lead to more structured products activity, according to foreign dealers.

In November, China's central bank cut the deposit interest rate from 3% to 2.75% and reduced the one-year benchmark loan interest rate from 6% to 5.6%.

"Following the deposit rate cut of 25 basis points, structured products look more attractive in

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