The Analysis Of The Effectiveness Of The Shibor As A Market Benchmark Interest Rate

Promoting market-oriented interest rate is an important part of China’s financial reform,China’s "Twelfth Five-Year Plan" clearly put forward to further deepen the financial system,"Steadily promote market-oriented interest rate reform, strengthening financial market benchmark interest rate system." Promoting market benchmark interest rate system’s primary task is to establish a market benchmark interest rate.As the prices of capital, any deviation of market benchmark interest rate from the equilibrium price will risk structure and the interest rate structure through conduction spread to the entire rate system, which affect a country’s savings, investment and money supply and demand, affecting the efficiency of the allocation of financial resources, industrial restructuring and redistribution of national income.China’s economic catch-up period, in order to promote rapid economic development and maintain financial stability while lowering financing costs, deposit and lending interest rates have been controlled by the state, the financial market segmentation, the lack of effective money market benchmark interest rate.As China’s economic growth slows down many drawbacks began to emerge, for example,the mismatch of financial resources, backward production capacity, reduce the effectiveness of interest rate controls."To promote financial market benchmark interest rate system, to further develop Shanghai Interbank Offered Rate (Shibor) benchmark role in expanding its market-oriented products in the application. Improve the long-term market yield curve for financial institutions to provide effective product pricing benchmark."Therefore, to improve and develop Shibor as a benchmark interest rate is not only an important task but also an indispensable infrastructure of China’s financial markets to establish a benchmark interest rate system.Shanghai interbank offered rate since officially launched in January2007, after six years of development has become an important pricing has been China’s interbank market benchmark. In this paper, we established Granger causality test、VAR model、 impulse response function and variance decompositions to observe Shibor whether possess of four properties as the benchmark interest rate of the marketability, stability, correlation, fundamentality.Conclusion Shibor as money market benchmark interest rates on various aspects of the performance is better, however, compared with Chibor foundational aspects needs to be improved, and easily influenced by the yuan against the dollar suggests that stability is insufficient.