Date
17 October 2017

Interest rate liberalization seen taking 3-5 years, paper says

China is expected to take another 3-5 years to realize interest rate liberalization, the China Securities Journal reported Wednesday, citing Wen Bin, a senior researcher with Bank of China’s International Finance Institute. In September, authorities announced that they would allow banks to price loans based on market-based benchmark lending rate in a first step to free up the interest rate. Speeding up the liberalization of deposit rate will be key move for next stage, Wen was quoted as saying. Top leaders vowed to push market-oriented interest rate reforms at the recent Communist Party plenum. Opening-up in finance industry is expected to accelerate accordingly. It will increase external risks and uncertainties and pose challenges for financial institutions as well as regulators, the report noted.

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