Banker seems to rule out rate cut

China's central bank governor, Zhou Xiaochuan, has cautioned that low interest rates, especially deposit rates, would remove pressures that force financial institutions to finance the real economy.

"China needs to maintain a certain gap between deposit and lending rates so that banks can profit from providing financing to the economy," Zhou said on Friday at the Business Week CEO Forum in Beijing.

He said unduly low deposit rates would make banks' capital too cheap and put them under less pressure to make returns on that capital by lending.