The benchmark interest rate for deposits and loans is the guiding interest rate for deposits issued by commercial banks issued by the Central Bank (People's Bank of China). It is one of the monetary policies used by the Central Bank to regulate the operation of the social economy and financial system. Commercial banks will formulate a combination of deposit interest rates based on this benchmark interest rate. Raising the benchmark interest rate means shrinking credit, reducing social mobility, increasing credit costs, and slowing economic development. vice versa.

The benchmark deposit rate is the guiding interest rate for commercial bank deposits announced by the People's Bank of China.

1) The deposit benchmark interest rate is the guiding interest rate for commercial bank deposits announced by the People's Bank of China.

2) The impact of its increase on the social economy:

Economic Impact

(1.) Consolidate the results of macro-control, maintain the good momentum of sustained, rapid, coordinated and healthy development of the national economy, and further leverage the role of economic means in resource allocation and macro-control.

(2). It is another important step to steadily promote the marketization of interest rates, which will help financial institutions improve their pricing capabilities and prevent financial risks.

Main Characteristics

The benchmark interest rate must have the following basic characteristics:

(1). Market-oriented. This is obvious. The base interest rate must be determined by market supply and demand, and not only reflect the actual market supply and demand conditions, but also reflect the market's expectations for the future;

(2). Fundamental. The benchmark interest rate occupies a fundamental position in the interest rate system and financial product price system. It has a strong correlation with the interest rates in other financial markets or the prices of financial assets;

(3). Transmission. The market signals reflected by the benchmark interest rate, or the regulatory signals sent by the central bank through the benchmark interest rate, can be effectively transmitted to other financial markets and financial product prices.

The benchmark interest rate is a universal reference rate in the financial market. Other interest rate levels or financial asset prices can be determined based on this benchmark interest rate level. Benchmark interest rate is one of the important prerequisites for interest rate marketization. Under the conditions of interest rate marketization, financiers measure financing costs, investors calculate investment returns, and management regulates the macro economy. Objectively, a universally recognized benchmark is required. Interest rate levels are used as a reference. Therefore, in a sense, the benchmark interest rate is the core of the interest rate marketization mechanism.