China's Money Market Benchmark Interest Rate Options, Interest Rate Market

With the development of economic globalization, all the countries will have much closer financial cooperation with each other. China should effectively reform its financial market, accelerate its process of interest rate marketization and join the trend of financial innovation as soon as possible. In recent years, China's money market has been improved a lot. But it is still not fully developed. One of the main reasons is lack of a real benchmark interest rate for a long time. The benchmark interest rate of money market, which is also the one of the whole financial market, is the core of the entire interest rate system. Its establishment is the precondition of the success of interest rate marketization. Thus under the background of stably promoting the process of interest rate marketization, it is very important, both theoretically and practically, to study the problem of selecting the benchmark interest rate of China's money market.This thesis first discusses the relative theories of interest rate marketizaiton and money market benchmark interest rate and then takes America, Great Britain and Brazil for example to analyze and summarize their results and reasons of selecting the benchmark interest rates of their own money markets. Next this thesis reviews the realized achievements of China's interest rate marketization and the existing problem of selecting the benchmark interest rate of China's money market and then theoretically analyzes the possibilities of China's main money market interest rates becoming the benchmark interest rate. Finally based on empirical researches this thesis emphatically compares the advantages and disadvantages Shanghai Interbank Offered Rate (Shibor) and Interbank Market Pledged Repo Rate would have if they were the benchmark interest rate of China's money market. Through the analyses and researches mentioned above, this thesis suggests the best choice of the benchmark interest rate of China's money market at present should be Shanghai Interbank Offered Rate (Shibor) and then offers some policy proposals.