PBOC governor: Interest rate liberalization on course

Central bank governor Zhou Xiaochuan said on Monday that all is on course to liberalize interest rates.

"We've got technical arrangements and other conditions in place for realizing such liberalization as soon as possible," he said in an interview with China Central Television.

"I'm optimistic about it. As far as I'm concerned, the process is going according to the original plan," Zhou said.

China scrapped the lower limit on bank lending rates, ending controls on lending rates in June, in a major step toward liberalizing interest rates. But analysts argued that the key to interest rate reform still lies in loosening the upper limit on deposit rates.

At that time the central bank said it has not touched the ceiling on deposit rates because it is the riskiest part of the reform and must be promoted step-by-step.

Zhou said the removal of lending rate controls wouldn't cause substantial change in lending rates. Instead, the change lies in introducing more pricing flexibility and liberty.

He added that the government will continue to maintain the exchange rate of the yuan at a "reasonable" level.