PBOC to streamline lending interest rate system

The People's Bank of China will streamline the lending interest rate system to further reduce borrowing costs for small and micro enterprises, the central bank said in its quarterly monetary policy report.

At an opportune time, the PBOC will identify a new policy interest rate and no longer post the benchmark deposit and lending rates, thus doing away with the existing "two-track" interest rate system, said Wei Hairui, a researcher with the PBOC's financial research institute.

A streamlined lending rate system will promote competition among financial institutions and enhance their ability to value risks and reduce risk premiums, the central bank said.