BEIJING--China's central bank said Monday that it would make interbank repo rates by depository institutions a key reference for setting prices in the nation's financial market, in its latest move toward interest-rate reform.
In a white paper published on its website, the People's Bank of China said it would use the new reference rates in setting prices of floating-rate debt and interest-rate swap products, two types of financial products usually traded in the nation's bond markets.
The PBOC also said it would encourage financial institutions to use the new reference rates in setting interest rates for certificates of deposits in the nation's interbank markets.
The central bank said it encourages international organizations to use the new reference rates for yuan-denominated assets, adding that the Chinese yuan has been increasingly used globally as a reserve currency.
China's central bank has long pledged to let the market play a more decisive role in determining the benchmark rates. Last year, it changed the government-set benchmark loan rates to a new system called Loan Prime Rate which will be priced based on interest rates offered by major banks to their best clients.
The latest reform is expected to give the market a bigger role in setting prices in the financial market.
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08-31-20 0751ET
