PBoC action ‘lays foundation’ for liberalisation

People's Bank of China
The People's Bank of China

The People's Bank of China (PBoC) has fleshed out its plans for interest rate liberalisation, as the central bank begins to relinquish its control over markets.

On November 21, the PBoC cut its benchmark lending and deposit rates and lifted the upper limit under which deposit rates are allowed to float. Yesterday, the central bank offered more details of the rationale behind the move.

"A higher upper limit on deposit rates will give the market a decisive role in determining interest rates and al

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