Chinese Market-oriented Reform Of Interest Rates In The Market, The Benchmark Interest Rate To Choose A Comparative Study

In the 1990s, China put forward the interest rate liberalization reform, through nearly 20 years endeavor, we had got some progress, and our central bank had relaxed part control of interest rate. But we will continue to accelerate the reform if we want to realize the interest rate liberalization. The most important of the reform is to choose a real suitable benchmark interest rate of the market.The benchmark interest rate of the market plays an important role in the whole money market and the interest rate system. Along with the our interest rate liberalization reform, the rapid development of the money market, the investors will get more profits from the more and more finance products. Many finance products, especial for the products related to the interest rate, will be rated by the benchmark interest rate of the market. On the other hand, as the goal of the macro-economy controlled by the central bank, the benchmark interest rate of the market is important to the whole money market and interest rate system. By adjusting the benchmark interest rate of the market, the Government will affect corporations' and persons' economic behaviors , and will trend to meet the monetary policy' s target. This article started with the determined factors and choice principle of the benchmark interest rate of the market, then through several countries' determined modes of choosing the interest rate for reference, comparing and analyzing several market interest rates by the choice principle of how to choose the benchmark interest rate of the market. The author considered that now in China, the most suitable benchmark interest rate of the market is Shibor(Shanghai Interbank Offered Rate).The article is composed to five parts. The first chapter was introduced the background of how to choose the subject and the domestic and foreign research trend of the benchmark interest rate of the market, and this article' s research angle of view. The second chapter was illuminated the choice principle of the interest rate of economics. In the third chapter, the author analyzed several determined modes of benchmark interest rate in several interest rate liberalization countries, and analyzed their useful experience. In the fourth chapter, through reviewing and evaluating our interest rate liberalization reform, the author analyzed the basic principle of how to choose the benchmark interest rate of the market, and compared the different effects and characteristics of one year deposit interest rate, bond interest rate and interbank placing and taking rate, then pointed out that the Shibor should be the most suitable benchmark interest rate of the market now. The last chapter was brought forward some suggestions to improve on the forming mechanism of Shibor.