PBOC to Retire Benchmark Deposit and Lending Rates, Pan Gongsheng Says

Retiring the benchmark deposit and lending rates is less a policy shock than a formalization of changes already underway: lending has leaned on the LPR and repo references, and the PBOC has been publishing average deposit rates by tenor since the first quarter. The significance lies in completing the shift to market-based pricing, which matters most for banks' deposit competition and net interest margins, and for how quickly policy rate changes transmit to retail and corporate rates. The open question is whether the average deposit rate by tenor becomes the de facto anchor, and how depositors and smaller banks adapt to a system without a legacy benchmark.