Chinese banks to cut interest rates in fresh stimulus bid

Move will apply to both mortgage and deposit rates

People’s Bank of China: The cuts to mortgage rates were highly anticipated by investors after the central bank hinted at support in mid-July. Picture: Getty

China’s largest banks are preparing to cut interest rates on existing mortgages and deposits, the latest state-directed measures to shore up growth in the world’s second-largest economy.

The big state-owned lenders are working on reducing rates on the majority of the nation’s 38.6 trillion yuan (€49 trillion) of outstanding mortgages, according to people familiar with the matter. The reductions will only affect loans on first homes, two of the people said.

Lenders such as Industrial ...