It is on the basis of the bank announcement that the benchmark interest rate for deposits and loans is raised by 20%.
The benchmark interest rate is a universal reference interest rate in the financial market, and other interest rate levels or financial asset prices can be determined according to this benchmark interest rate level.
Benchmark interest rate is one of the important prerequisites for interest rate marketization. Under the condition of interest rate marketization, financiers need a universally recognized benchmark interest rate level as a reference to measure financing costs, investors calculate investment returns and management's macro-control. Therefore, in a sense, the benchmark interest rate is the core of the formation of interest rate marketization mechanism.
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Different interest rate levels reflect different policy requirements. When the policy focuses on stabilizing the currency, the interest rate of central bank loans should be raised in time to curb overheated demand. On the contrary, it should be lowered in due course.
The benchmark interest rate is the deposit and loan interest rate stipulated by the People's Bank of China for national specialized banks and other financial institutions. Specifically, the common people regard the one-year fixed deposit interest rate of the bank as the market benchmark interest rate index, and the bank regards the overnight lending rate as the market benchmark interest rate.
The market signal reflected by the benchmark interest rate, or the regulatory signal sent by the central bank through the benchmark interest rate, can be effectively transmitted to other financial markets and financial product prices.