Central bank here in China is taking another step toward creating more financial freedom in the Free Trade Zone in Shanghai.
In its latest move, the PBOC is set to remove the interest rate ceilings on smaller foreign-currency deposits in the FTZ.
The new rules will be effective from March 1st.
The relaxation of the rules applies to deposits of less than 3 million U.S. dollars.
Currently, regulatory caps apply to one-year or other shorter-term deposits in U.S. dollars, the Japanese yen, euros and Hong Kong dollars.
Deposits worth more than 3 million U.S. dollars are not subject to the interest rate ceilings.
The move marks the full liberalization of interest rates on foreign-currency deposits in the FTZ.
Zhang Xin is the deputy director of the PBOC's Shanghai headquarters.
"We hope that the Shanghai FTZ could well-manage the risk control in their daily work; particularly in the areas of monitoring massive deposit transfer and large-scale cross-border arbitrage. To be vigilant in assessment and enhance check-ups to fluctuations in a timely manner."
Official data shows foreign-currency deposits in the Shanghai FTZ currently total 4.8-billion U.S. dollars.
Among this, 1.2 billion U.S. dollars is the smaller deposit category.
