IMF charts path towards PBoC policy rate

People's Bank of China

The People's Bank of China (PBoC) should stabilise borrowing costs in the interbank market as an "interim step" towards establishing a policy rate, the International Monetary Fund (IMF) said this week.

In its latest staff report on China, the IMF said the PBoC should create an interest rate corridor in the interbank market as a way of smoothing the volatility in short-term borrowing costs.

It also called on the PBoC to introduce reserves averaging – a method of incentivising banks to maintain

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