PBoC frees up Shanghai foreign deposit rate |
2014-06-28 01:26 |
A statement by the This is the first reform piloted in Shanghai FTZ to be expanded outside the zone. Though banks are now allowed to negotiate a rate with clients, regulators fear a scramble for funds by raising the rate too much and have brought together 15 banks into a committee to ensure rates are in line with market demand and do not vary dramatically between banks. Authorities hope the committee will infuse some discipline into banks and avoid interest rate volatility. According to Pan Yuehan, head of the Inclusion of foreign banks such as HSBC on the committee suggests that authorities value foreign bank's pricing sophistication. The central bank intends to use the foreign deposit rate pilot to gain experience for liberalizing the rate for yuan deposits. |