PBoC monetary policy reform could be 'trial and error', economists warn

By removing the cap on deposit rates, the PBoC is allowing banks to bid up deposit rates in order to attract depositors at a time when returns on savings remain low

When the Chinese government surprisingly announced it would scrap its one-child policy after 30 years last week, western media unsurprisingly heralded it as a historical moment. The People's Bank of China's (PBoC) announcement six days earlier that it would scrap the ceiling on rates that banks are allowed to pay depositors, and move towards a corridor-based monetary policy regime, may have garnered less attention, but was also of major consequence.

Obscured by cuts to the "benchmark rates" and

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: