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China OKs interbank trading of deposit certificates

Updated: 2013-12-09 10:51
( Xinhua)

BEIJING - China's central bank on Sunday published a guideline on deposit certificates in the interbank market, another step towards fully floating interest rates.

Effective from Monday, financial institutions are required to report their annual plans for the issurance of deposit certificates to the People's Bank of China (PBOC) before entering the market, with one-time minimum volume at 50 million yuan ($8.2 million), the PBOC said in an online statement.

This will allow banks to borrow at more stable costs in the interbank market.

The issuance will be priced in reference to the Shanghai Interbank Offered Rates (Shibor), with the maturities of fixed-rate certificates ranging from one month to a year while that of floating-rate certificates at one year to three years, according to the statement.

The move is part of China's loosening of controls on deposit rates following its move in July to scrap the floor limit of lending rates.