Research On Performance Characteristics Of Shibor During The Process Of Interest Rate Liberalization In China

This paper aims to examine whether the 7-year-old Shibor meets requirements as the benchmark rate of money market. Because Interest rate liberalization is the core issue for China’s financial reforms in recent decades, and the key task for interest rate liberalization is to build a sound and effective system of benchmark interest rate, while government plans to build Shibor as a Chinese version of "Libor". After comprehensive study of the domestic and foreign literature, the author sum up six basic characteristics of the benchmark rate, including marketability, scalability, stability, basis, controllability and relevance, and then try to use some experimental analysis to test Shibor. The author finds that Shibor shows a good marketability, scalability, and controllability; Stability is not a condition for benchmark interest rate; Shibor perform bad in basis, affected by rapo rate; Compared with economic growth, inflation makes a greater impact on Shibor; besides, Asymmetric financial reform affects performance of Interest Rate Parity Theory. The article try to get some proposals to construct Shibor.