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.