BEIJING (Reuters) -China's&nbsp;biggest&nbsp;banks&nbsp;on Thursday said they have lowered interest&nbsp;rates&nbsp;on yuan&nbsp;deposits, in actions that could ease pressure on profit margins and reduce lending costs, providing some relief for the financial sector and wider economy.
Industrial and Commercial Bank of China Ltd, Agricultural Bank of China Ltd, Bank of China Ltd and China Construction Bank Corp all&nbsp;cut&nbsp;their&nbsp;rates&nbsp;from Thursday, websites from each bank showed.
The&nbsp;state-backed&nbsp;banks&nbsp;cut&nbsp;rates&nbsp;on demand&nbsp;deposits by 5 basis points and three-year and five-year time&nbsp;deposits by 15 basis points.
This is the second such&nbsp;cut&nbsp;within a year, with previous action taken in September.
"The&nbsp;deposit&nbsp;rate&nbsp;cuts will push savings into consumption and investment and ease the pressure on&nbsp;banks' net interest margins (NIM), opening the door for further monetary stimulus," said Gary Ng, Asia Pacific senior economist of Natixis.
He expects a 50 basis points&nbsp;cut&nbsp;in the reserve requirement ratio (RRR) soon to support local government bond issuance. But additional loan prime rate&nbsp;cuts will only come if economic data or financial risks deteriorate to a level that prevents China from meeting its 5% target, said Ng.
China&nbsp;cut&nbsp;the RRR in March but has kept its benchmark lending rate unchanged this year, as widening yield differentials with the United&nbsp;States limited the scope for substantial monetary easing.
Major&nbsp;state&nbsp;banks' net interest margins have shrunk following pressure to lower borrowing cost for individuals and businesses to stimulate the economy, and as credit demand remains subdued.
China's&nbsp;economy rebounded faster than expected in the first quarter but lost momentum at the beginning of the second, grappling with tumbling exports, a sluggish housing market and a high unemployment ratio.
A regulatory body overseen by the People's Bank of China has asked the lenders to also lower U.S. dollar&nbsp;deposit&nbsp;rates, four people with direct knowledge of the matter said on Tuesday.
The benchmark CSI&nbsp;Banks&nbsp;Index rose 0.35% in morning trading on Thursday.
(Reporting by Beijing newsroom; Editing by Christopher Cushing and Sam Holmes)

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China's biggest state banks cut deposit rates