Chinese interest rate reform is gathering speed

Todd Warshaw/Getty Images

China’s central bank, the PBOC, has announced further measures to deregulate domestic interest rate markets.

Late on Tuesday evening the bank announced that from Thursday lenders will be allowed to issue certificates of deposit (CDs) to individuals and corporates , according to Bloomberg.

The product, a fixed-term discount security with either a fixed or floating interest rate, will have a minimum investment size of 300,000 yuan that can extend to 10 million yuan for corporates. Crucially, in terms of market liquidity and product marketability, some certificates will allow for resale back to the issuer or to a third party outside the initial transaction.

In the past CDs could only be traded between banks, or interbank, and not with other parties.

The reform, just one of many seen this year, suggests the PBOC is moving towards completely deregulating interest rate markets, potentially as early as the end of 2015.

You can read more here.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at