Shanghai Inter-bank Interbank Offered Rate As A Discussion Of China's Benchmark Interest Rate

Along with further market economy development and improvement in China, financial reforms are in the progress of continuously deepening and interest rate market-oriented is one of the key points in that. The most important thing of interest rate market-oriented is setting up a Bench Mark by a large number of components, and then come into being a reasonable market rate system. At the international level, we usually choose LIBOR as market benchmark rate. "SHIBOR" operated formally on Jan.04^th, 2007 which attracts much attention in financial market. That is an important measure to build Chinese-style "the federal funds rate," and to cultivate the money market benchmark interest rate system by PBOC which meaning a key step and creating a new age of interest rates.This article summarized the principles of choosing benchmark interest rate and practices in international market and analyzed the select problem of suitable market benchmark rate in the environment of opening system. By analyzing the function of SHIBOR and its impact on financial markets, and demonstrating its feasibility and limitations, then forming a number of measures and suggestions which covering the development of the marke??ansaction, enrichment of transaction varieties, expansion of trade scale, increasing market coverage, improvement of market management, etc. Through that, we could speed up the monetary market development further, improve market efficiency, let SHIBOR have a sensitive response for capital demand and create the conditions for really market benchmark.