Interest rate liberalization means that the interest rate level for financial institutions operating and financing in the money market is determined by market supply and demand. It includes marketization of interest rate determination, interest rate transmission, interest rate structure and interest rate management. In fact, it hands over the decision-making power of interest rates to financial institutions, and the financial institutions independently adjust the interest rate levels based on their capital status and judgment of financial market trends. Ultimately, the central bank's benchmark interest rate is used as the basis, and the money market interest rate is used as the basis. Intermediary, the market interest rate system and interest rate formation mechanism that determines the deposit and loan interest rates of financial institutions based on market supply and demand.

Since July 20, 2013, the People's Bank of China has decided to fully liberalize loan interest rate controls on financial institutions.

Since May 11, 2015, the People's Bank of China has decided to adjust the upper limit of the floating range of deposit interest rates of financial institutions from 1.3 times to 1.5 times the benchmark deposit interest rate.

Since August 26, 2015, the People's Bank of China has decided to relax the interest rate floating ceiling for time deposits with a maturity of more than one year (excluding one year), marking another step forward in China's market-oriented interest rate reform. An important step has been taken

Since October 24, 2015, the People's Bank of China has decided to no longer set a floating upper limit on deposit interest rates for commercial banks and rural cooperative financial institutions.

The interest rate marketization will be completed in the next 3-5 years. It will be completed step by step, hierarchically and stage by stage, which is both scientific and reasonable. The lifting of the lower limit on loan interest rates marks a key step in China's interest rate marketization reform, and the interest rate marketization process has entered a new stage.

Interest rates may be liberalized or the deposit interest rates may be liberalized in an orderly manner at an appropriate opportunity. After the deposit interest rates are liberalized, idle funds can be absorbed more effectively and the idle funds in society can be put to good use. If interest rates rise, It can attract more idle funds from large customers. After the interest rate marketization, financial institutions can determine the interest rates according to their own characteristics. Then appropriately raising the deposit interest rate can attract more idle funds in a short period of time to prepare for future development. To better utilize idle funds, interest rate liberalization can play a positive role. Improve capital utilization efficiency, better create value, and better promote economic development.