China’s People’s Bank of China (PBOC) has released an article titled “Continuing to Deepen the Market-Based Reform of Interest Rates” as part of its efforts to implement the spirit of the Central Financial Work Conference. The conference highlighted the importance of deepening the structural reform of the financial supply side, with interest rate marketization being a core focus.
The article emphasizes the PBOC’s commitment to serving the real economy and improving the market-oriented reform of interest rates. It aims to enhance the formation, regulation, and transmission mechanisms of market-oriented interest rates, facilitating the allocation of financial resources and reducing financing costs. The PBOC’s efforts in reducing existing mortgage interest rates have also been highlighted.
The article commends the PBOC’s efforts in the marketization of deposit and loan interest rates. It mentions the successful implementation of the loan prime rate (LPR) reform, which has led to a significant decrease in interest rates for corporate loans. The establishment of a market-based adjustment mechanism for deposit interest rates has also resulted in multiple reductions in interest rates by major financial institutions.
Regarding mortgage interest rate policies, the PBOC has implemented various measures to adjust and optimize them. The article mentions the establishment of a dynamic adjustment mechanism and the lowering of interest rates for first-home and second-home loans. As a result, over 22 trillion yuan in existing mortgage interest rates have been reduced, benefiting more than 50 million households and 150 million people.
To maintain the order of competition in the interest rate market, financial institutions are urged to adhere to risk pricing principles and standardize deposit interest rate pricing practices.
In terms of future plans, the article outlines three priorities for the PBOC. The first is to improve the formation, regulation, and transmission mechanism of market-oriented interest rates. The second is to further promote the marketization of deposit and loan interest rates to guide the continued decline of financing costs. The third priority is to enhance the marketization of mortgage interest rates to support housing demand.
The article concludes by mentioning related reports on the deepening market-oriented reform of interest rates and the source of the article, Brokerage China.
It is important to note that the content of the article is meant to disseminate information and does not constitute investment advice.