(Yicai Global) June 12 -- China Merchants Bank, China Everbright Bank, China Citic Bank and eight other joint-stock Chinese banks slashed their deposit interest rates today, following a similar move by the country’s six biggest state-owned lenders last week.

The 11 joint-stock banks revised their nominal deposit rates downwards by between five and 15 basis points, same as the state-owned lenders, according to Yicai Global research. China Merchants Bank now has the lowest interest rates among them.

China’s six biggest state-owned commercial banks, including Industrial and Commercial Bank of China and Agricultural Bank of China, trimmed deposit rates on June 8 for the second time since September.

The rate cuts will ease interest-bearing debt pressure and allow banks room to offer more loans to firms, market analysts said. There is still space for further reductions, especially on one-year and two-year deposit rates.

The People’s Bank of China will probably continue to lower fundraising costs for the real economy by adjusting its benchmark lending rate, known as the loan prime rate, and its medium-term lending facility, said Wang Yifeng, chief financial analyst at Everbright Securities. The possibility of trimming the MLF rate further if the timing is right cannot be excluded in the third quarter.

The team led by Ming Ming, chief economist at Citic Securities, though, felt that the MLF rate will probably be lowered by between five and 10 bps this month, and the LPR is also likely to be brought down accordingly.

The latest rate cuts are not a sign that lending rates will fall as the trimming of deposit rates last September did not lead to drops in the LPR and MLF, said Lin Jiali from Haitong International Securities Group.

Editors: Zhang Yushuo, Kim Taylor