China expects to fully liberalise interest rates on bank deposits within two years, the central bank governor said on Tuesday.
The move will follow steps last year to remove a required minimum interest rate for state-run commercial banks and to pilot negotiable deposit certificates for the interbank market, said Zhou Xiaochuan, governor of the People’s Bank of China.
“Deposit-rate liberalisation is definitely on the agenda,” Zhou told reporters on the sidelines of the annual state parliament.
“I personally think it is very likely to be achieved within the next one or two years,” he said.
Zhou said the recent popularity of investments in internet-based funds, which pay higher interest rates than the banks, showed that China must allow the market to play a greater role in financial services.
The Government will also continue its gradual internationalisation of China’s renminbi currency, without setting a timetable, he said.
The ruling Communist Party’s financial reforms are among a series of measures aimed at boosting domestic consumption and restructuring the world’s second—largest economy away from its long reliance on exports and investment in infrastructure.