Banks are in now in a dilemma, so most dare not drop the rate due to the fierce competition.
The impact on the economy is that unemployment will increase and maybe commercial banks will face a difficult operating situation. It's a risk to our economy.
If the yuan rises too rapidly, a lot of overseas investors might move their factories or companies out of China.
That would increase unemployment and hurt our economy, and commercial banks could also face a difficult operating environment.
We have a very good start for the foreign exchange regime ... We also want liberalization of interest rates.
If more and more enterprises and industries sell their U.S. dollars or foreign exchange maybe the yuan will have appreciation pressure. We don't want these kinds of capital flows to have a very strong impact on the economic growth trend.
Although the economic situation is sound, we need to pay attention.
Depositors' incomes will be lower if banks drop the deposit rate. Most banks are not ready to face the aftermath.
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