China could free up interest rates on bank deposits as soon as this year, People’s Bank of China (PBoC) Governor Zhou Xiaochuan indicated Thursday.
The nation is moving “very close” to letting banks decide for themselves what rates they will offer as they compete for people’s savings, the central bank chief said, according to the Wall Street Journal.
“If there is an opportunity this year, the deposit-rate ceiling will be lifted,” Zhou was quoted as saying at a news conference amid China’s annual parliament session.
As a prelude to liberalizing deposit rates, a long-awaited insurance plan to protect bank depositors will be launched in the first half of this year, the PBoC chief said.
In other comments, Zhou dismissed calls for more aggressive easing measures to shore up the world’s second-largest economy.
The “new normal” of slower economic growth “doesn’t necessarily require a new monetary policy,” he said, according to the report.
The US Federal Reserve’s expected move to raise interest rates “won’t pose a big threat” to China, Zhou said, aiming to dispel concerns over a potential surge in capital flight from the country.
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