The Empirical Analysis Of The Impact Of The Interest Rates On Residents’ Savings In China

As an important part of monetary policy, interest rates policy is also one of the primary means of monetary policy. In recent years, the central bank has strengthened the use of interest rates instrument, and interest rates policy has gradually become one of the frequently used tools of monetary policy during this period of time. From1996to1999, China’s central bank lowered financial institutions RMB deposit and loan interest rates for seven consecutive times, the one-year deposit interest rates from9.18%on May1st,1996, had been lowered to2.25%on June10th,1999, the down magnitude was the first time ever. Entering the new century, the interest rates adjustment is more frequent, and only in the year2007, China’s central bank raised the level of interest rates for six consecutive times, the frequency was rare.Since the reform and opening up, Chinese residents’ savings continues to grow rapidly.Urban and rural residents’ saving deposits is on the rise year by year, by the end of2010, up to about30330million yuan.As the key part of national savings, the rapid growth of the household savings, on one hand, provides strong financial support and protection for our socialist modernization construction; on the other hand, the high savings rate limits residents’ investment and consumption, to a certain extent, having the negative influence on the sustainable development of China’s economy. During a period of time, lowering interest rates to curb savings, or raising interest rates to curb the overheating economy become the basis of the implementation of the macro economic policy. How this series of changes in interest rates will throughoutly have impact on the residents’savings, therefore, the research on the relationship between the interest rate and savings is necessary.In the1990s, the Shanghai Stock Exchange and Shenzhen Stock Exchange were established and operated, marking the formation and the initial development of China’s capital market.Along with the development and the increasing mature of capital market, the diversification choice of residents’ wealth gradually increases, residents’ savings will be gradually diverted to the capital markets. Under the increasingly weakened influence on planned economy to income and savings, the opportunities for diversification of assets will strengthen the sensitivity of interest rates on household savings, which will also provide the possibility and necessity to regulate household savings by lowering interest rates.Accordingly, this paper attempts to examine the relationship between China’s household savings and interest rates since China’s capital market formed in1992, and analyzes the impact of interest rates on household savings in China under the new economic system, and explore whether the opportunities for diversification of assets will enhance the sensitivity of interest rates on household savings.Based on the above analysis,we draw the following conclusions:1,urban and rural residents’ disposable income is the most important and significant factor, the income elasticity of residents’savings is greater than1, that is to say, the rate of growth of residents’ deposit is greater than that of residents’ income, which is also consistent with the actual situation of our country at this stage;2, the relationship between interest rates and household savings is weak.Compared to the real interest rate, the nominal interest rate has greater correlation with savings, but both are quite low. The nominal interest rates elasticity of residents’ savings is+0.23, and the T-statistic is not significant, indicating that the nominal interest rates has not significant, weak, but positive effect on household deposit, the interest rates elasticity of saving deposits is still quite low.3, with the gradual development and perfection of the capital markets, capital market is gradually strengthening the role of diverting savings, the diversity of residents’ choice of assets is promoting savings to investment.Since this period, capital market has greater and more significant effect on residents’ savings than the interest rates.