The People's Bank of China Raises Both Lending And Deposit Interest Rate

Starting from 29 October 2004, the People's Bank of China raise both lending and deposit interest rate and broaden the floating degree of lending interest rate for RMB and allow the RMB deposit interest rate to float downward.

1. The one-year deposit interest rate will increase from 1.98 percent to 2.25 percent, (raised interest rate 0.27 percentage point) while the one-year lending interest rate will rise from 5.31 percent to 5.58 percent (raised interest rate 0.27 percentage point). Deposit and interest rate for other categories will also be adjusted accordingly; and the adjustment extent for medium and long-term interest rate will be larger than that for short-term rates.

2. Further broaden the floating scope of lending interest rate for financial institutions
a) It will no longer set the ceiling of lending interest rate for financial institutions, excluding credit unions in both urban and rural areas. The lift limit of the lending interest rate will remain unchanged as 0.9 times of the benchmark rate. For the urban and rural cooperatives whose comparative situation is under development, the upper limit of their lending interest rate will be maximally 2.3 times of the benchmark rate while the degree for rate deduction will remain unchanged.

b) Allowing the RMB deposit interest rate to float downward means the rate for financial institutions can float to the extent of deposit benchmark rate but the deposit rate cannot be floated upward.

從2004年10月29日起中國人民銀行上調金融機構存貸款基準利率並放寬人民幣貸款利率浮動區間和允許人民幣存款利率下浮。

一、 金融機構一年期存款基準利率，由現行的1.98%提高到2.25%，上調0.27個百分點；一年期貸款基準利率由現行的5.31%提高到5.58%，上調0.27個百分點。其他各檔次存、貸款利率也相應調整，中長期上調幅度大於短期。

二、 進一步放寬金融機構貸款利率浮動區間。
1） 融機構（不含城鄉信用社）的貸款利率原則上不再設定上限，貸款利率下浮幅度不變，貸款利率下限仍為基準利率的0.9倍。對金融競爭環境尚不完善的城鄉信用社貸款利率仍實行上限管理，最高上浮係數為貸款基準利率的2.3倍，貸款利率下浮幅度不變。

2） 允許存款利率下浮，即所有存款類金融機構對其吸收的人民幣存款利率，可在不超過各檔次存款基準利率的範圍內浮動。存款利率不能上浮。