Foreign-currency deposit rates relaxed in Shanghai   

首项自贸新政推广至区外 上海放开小额外币存款利率上限

Shanghai (ECNS) – China has decided to expand a trial in the Shanghai Free Trade Zone (FTZ) to the whole city to let banks set foreign-currency deposit rates.

The People's Bank of China announced Thursday that starting from June 27, it will remove the ceiling on the interest rates of small foreign-currency deposits of less than $3 million. This will apply only to companies at first, but could be extended to individuals.

It will be the first financial policy to "graduate" from the Shanghai FTZ after a successful trial since March 1. The free trade zone is used by the government as a testing ground for economic and financial innovations.

Removing the cap means the market will play a greater role in setting interest rates. However, analysts view it as a small step toward the liberalization of interest rates throughout the country, as foreign-currency deposits only account for a small share of China's total deposit base.