The People’s Bank of China (PBOC) announced Wednesday that the ceiling on interest rates for foreign-exchange deposits will be lifted in Shanghai’s free trade zone, in a possible step toward reforming the country’s interest rate mechanism, South China Morning Post reported. Banks inside the 28.78 square kilometer FTZ will be allowed to pay corporate and individual clients as much interest as they want from the start of next month on foreign currency deposits worth no more than US$500,000. “We are very cautious on implementing the policy and are worried about potential risks,” said Zhang Xin, chief of the PBOC’s Shanghai branch.
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