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China may scrap floor for bank lending rates

SHANGHAI – China may scrap the official floor under banks’ lending rates as the first major step to liberalise its interest rate regime, the official China Securities Journal reported on Friday, as regulators signal for accelerated reforms to cope with distorted capital flows and slowing economic growth.

“Plans for promoting interest rate liberalisation have already been drafted,” the report said.

“Industry sources forecast that the floor for lending rates will be scrapped.”

The official mandated lending rate currently stands at 6 per cent.

http://www.todayonline.com/business/chin...ding-rates

Wonder how market will react to this news ?

China's central bank announced long-awaited interest rate reforms on Friday, removing controls on the rates banks may charge clients for loans, in a step towards more market-driven pricing of credit.
The People's Bank of China (PBOC) said in a statement on its website that it was removing its floor on lending rates for commercial banks, meaning that banks will now be able to cut rates as much as they see fit to attract borrowers.
The central bank said it hoped the move will lower financial costs for companies.

Following-up news update...

China lifts lending rate controls

BEIJING — China’s central bank has unveiled long-awaited interest rate reforms, removing controls on the rates banks may charge clients for loans, in a step towards more competitive market-driven pricing of credit in Asia’s largest economy.

The People’s Bank of China (PBOC) said in a statement on its website late yesterday that it would remove the floor on lending rates for commercial banks, meaning they will now be able to cut rates as much as they see fit to attract borrowers.

http://www.todayonline.com/business/chin...e-controls

I moved this thread to "Economic News" from "Singapore Listed Companies" which is a more appropriate location.

Thanks

(21-07-2013, 07:13 PM)CityFarmer Wrote: [ -> ]I moved this thread to "Economic News" from "Singapore Listed Companies" which is a more appropriate location.

Thanks

Noted with thanks.