The People’s Bank of China, having increased the flexibility of deposit rate pricing last week, appear to be taking further steps towards deregulating domestic interest rates.
According to sources familiar with the matter the bank will trial the issuance of certificate of deposits (CDs) to households and businesses later in May.
At present CDs can only be issued by by banks to other banks, not to individuals, households or businesses.
Increasing the maximum ceiling for deposit rates payable, along with greater product choice should this rumour be correct, suggests the PBoC are moving towards full rate liberalisation, potentially as early as this year.
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