China takes step towards interest rate liberalisation

SHANGHAI, Feb 26 (AFP): China has taken a step towards liberalising interest rates by allowing foreign currency deposit rates to be freely set in its new Shanghai free trade zone (FTZ), the central bank said Wednesday. From March 1, banks in the FTZ will be able to set their own rates for foreign currency deposits, the Shanghai branch of the People's Bank of China said in a statement on its website.

The move does not apply to deposits in China's yuan currency. China began allowing banks to decide their own lending rates in July last year, but still sets deposit rates by administrative order.