More freedom on interbank interest rates

The central bank has launched a set of market-determined interest rates for borrowing between banks intended to deepen the onshore money market. Traders expect the Shanghai interbank rates, known as Shibor, to help develop China's fledgling interest-rate swap market by providing pricing reference, the Wall Street Journal reported. Shibor, which replaces the government-set China interbank offered rate (Chibor), will be based on interest rates offered by 16 banks on the interbank market for periods ranging from one night to one year. The identity of these market maker banks has not been disclosed, but they are likely to include the Big Four state lenders, six smaller banks, three city commercial banks and possibly three foreign banks, according to the South China Morning Post.