Feasibility Study On The Repurchase Rate Of The Inter-bank Market Depository Organization With The Interest Rate Debt As The Benchmark Interest Rate

The benchmark interest rate plays an important role in the macroeconomic market,affecting and guiding changes in other interest rates,and is the core interest rate of the entire financial market.In the financial system,the pricing mechanism of financial products has strict rules.The benchmark interest rate serves as the basic interest rate to guide the pricing of financial products.A reasonable benchmark interest rate has a positive effect on economic development and can help China's financial market to develop steadily and rapidly.As early as the 14 th National Congress,the “Decision on Financial System Reform” was issued.Throughout the report,a number of breakthrough ideas and viewpoints were mentioned constructively.Market-oriented,benchmark interest rates were the core,according to the market.The self-regulating ability determines the management system of various interest rate levels.According to the reform policy,the progressive control mechanism will be withdrawn from the historical arena,and an interest rate system based on the benchmark interest rate and adjusted by the market will be established according to the market orientation.In the process of promoting interest rate marketization,how to choose the appropriate benchmark interest rate has always been a key point for researchers to explore and debate.In 2007,the People's Bank of China launched the Shanghai Interbank Offered Rate(Shibor),which many scholars regarded as a guiding experiment in the pre-incubation of China's benchmark interest rate and received wide attention.In today's rapid economic development,the process of interest rate liberalization is also accelerating.The PBOC has abolished many restrictive interest rate policies.Commercial banks can adjust interest rates within a reasonable range.In 2015,the interest rate ceiling of rural cooperative institutions and commercial banks is no longer limited,and China has since been brought to a new stage of interest rate liberalization.In order to better select and control the benchmark interest rate,the PBOC will put the interest rate corridor back on the agenda in the “Prepared and Facilitated Situation in the First Quarter of 2015” and explore the function of the Standing Loan Facility(SLF)interest rate as the upper limit of the money market interest rate corridor.The commercial bank's excess deposit reserve rate is used as the lower limit of the money market interest rate corridor.The purpose of the interest rate corridor is to enable the benchmark interest rate to fluctuate within the interest rate corridor.It not only reflects the Marketability that the benchmark interest rate fluctuates with the capital market,but also reflects PBOC's control over benchmark interest ratesFor the first time in the “Monetary Policy Implementation Report for the Third Quarter of 2016”,7-day deposit repo rate(hereinafter referred to as DR007),which is pledged by interest rate bonds,has a positive effect on the cultivation of benchmark interest rates.In the report,the PBOC gave a high evaluation of DR007,indicating that the DR007 interest rate fluctuated with the PBOC's seven-day reverse repurchase open market operating rate and was generally stable,reflecting rapid changes in the macro economy,it also fully demonstrates the liquidity premium risk in the market.Since the participating institutions of DR only include deposit-type institutions with higher credit ratings,the collateral only includes bonds with extremely low credit risk such as treasury bonds,central bank bills and interest rate bonds,so DR can simultaneously control the risk perturbations of participating entities and pledges,and Fairly showing the interest rate situation and financing pressure in the market.The report shows that the PBOC has the intention of cultivating DR as a market benchmark interest rate.In the domestic market,many people have only heard about DR.They have not been systematically studied and analyzed,and many scholars have limited knowledge and understanding of it.In this paper,the author compares DR with other major interest rates in the money market.Through empirical analysis of DR,it compares it with Repo and Shibor in terms of marketability,stability,relevance and controllability,thus giving a conclusion on whether DR is suitable as China's benchmark interest rate.