Scrapped deposit rate cap leaves China observers without benchmark rate

The People’s Bank of China will continue setting benchmark saving and lending rates for an unspecified period of time after announcing the end of its bank deposit rate ceiling on Friday, Bloomberg reported, citing a statement published Monday on the central bank’s website. Friday’s move left the PBOC juggling multiple gauges – including seven-day interbank rates and one-year lending benchmarks – in lieu of a single clear yardstick for the cost of money, leaving observers uncertain of what the real benchmark rate for China is. The bank said that once the formation, transmission and management of market-based interest rates are in place it will no longer set savings and lending rates.