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PBOC Aims at RMB Capital-account Convertibility
China's central bank will make active efforts to achieve capital-account convertibility of RMB in accordance with the reform of the country's financial reform and the supervising capability of the central bank, Liu Tinghuan, deputy governor of the People's Bank of China, told a commercial banking conference in Macau on Wednesday.
He said China will gradually get rid of the debt burdens of state-owned commercial banks and build a modern commercial banking system with the introduction of a joint-stock mechanism.
Such reformed share-holding commercial banks and municipal commercial banks throughout the country will compete with each other and only the strong ones survive, he said.
The central banker also said gradually China's management of interest rates will be actually based on monetary supply and demand in the financial market with the interest rates of the central bank acting as the basic regulating level.
The control over the interest rates of foreign currencies will be lifted first and the rates of RMB afterwards. The control over interest rates at financial institutions in rural areas will be lifted first and in urban areas afterwards. The control over lending rates will be lifted first and deposit rates afterwards, he said.
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