20 September 2018

China preparing to remove deposit rate control, paper says

China will focus on setting up an open and fair environment for competition in the financial system before removing controls on deposit rates, the 21st Century Business Herald reported Thursday, citing Hu Xiaolian,{胡曉煉} vice governor of the People’s Bank of China. As part of efforts to promote a market-based interest rate regime, the central bank will establish a target rate system, similar to the US Federal Reserve’s funds rate, which will serve to influence rates in the market, Global Times reported, citing Liu Ligang, chief economist at ANZ Banking Group. Financial institutions will be allowed to offer large-denomination certificates of deposits (CDs) which will enable depositors to negotiate for a preferential deposit rate. Hu also said individuals and general enterprises may be included in the pilot CD scheme later.

– Contact HKEJ at [email protected]




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