Study On Market-oriented Reform Of Interest Rates In Rural Financial Market Of Our Country

Agriculture is always the emphases for the economy development of our country. But the biggest difficult problem which our country agricultural development faces is the fund lacks, and this creates one of basic reasons which lag agricultural development. Interest rate, as the price of capital, directs the flowing of rural capital. The regulated interest rate has being supporting "three agricultural" with cheap capital whose price is lower than equilibrium. However, problems also arise, which include: the reversal of saving interest rate and loan interest rate, low efficient of rural financial institute, out-flow of rural capital, the unsatisfied loan demand of peasants.As China's market-oriented economic reform comprehensively promotes, the negative effects of rural rates regulation gradually surpass the positive effects of the subsidies policy of "three agricultural" production. Therefore, the idea of gradually relaxing rural financial interest rates control and the implementation of market-oriented interest rate reform was put on the agenda. In recent years, the state has adopted a series of policy reform measures, including giving more floating authority to rural financial institutions loan, rural credit cooperatives market-oriented interest rate reform. Through theoretical and empirical validation, the rural market-oriented reform of interest rates should be and has achieved certain results: rural credit grew, support for economic development more pronounced; Farmers credit conditions improved; Margin expansion of the rural financial institutions enhanced the financial sustainability.However, rural market-oriented interest rate reform is also facing some restrictive factors affecting the full effect of the reform, and will even produce some negative effects. In this paper, these restrictive factors are fully analyzed, and at the same time, recommendations for policy reform measures are also made.