PBOC Reforms Deposit Interest Rates: Caixin

The People’s Bank of China has established a market-based mechanism for deposit interest rates, allowing member banks to refer to the 10-year treasury bond yield and the benchmark 1-year Loan Prime Rate to adjust rates, Caixin reported citing the PBOC’s Q1 monetary policy report published on Monday. This is the first official disclosure of such a mechanism which would allow banks to stabilise debt costs and promote a further decline in actual lending rates, Caixin said. In the last week of April, the weighted average interest rate of new deposits in financial institutions nationwide was 2.37%, down 10 basis points from the previous week, Caixin said.