A Study On The Effectiveness Of Chinese Benchmark Interest Rate In Money Market

With the marketization of interest rate of our country basically completed, the development of finance ial innovation, the deepening of financial reform, quantity adjustment tool has been unable to well meet the needs of Chinese economic development, Chinese monetary policy tool changes from quantity adjustment tool to the price adjustment tool has become a trend and necessary backup.So the clearly definite benchmark becomes the priority among priorities. Dollar, euro, pound, yen, the main currencies of the world have a clear official benchmark interest rate,But,I’m afraid, China is the only country that even the professional institutional investors also may not have a unified and concise answer of the benchmark interest rate for RMB. At present, the benchmark deposit and lending interest rates are still playing the role of the stability in the deposit and lending market. LPR since launched its pricing function is being strengthened. And the central bank repo rate, bond collateral repo rate, the operation of the new monetary tools SLF and MLF interest rate, national debt interest rate, and the last, SHIBOR cultivated as our currency market benchmark interest rate, these rate above are all playing the role of a certain benchmark interest rate in our currency market. In this complicated interest rate system, the selection of the reasonable benchmark interest rates is quite difficult.In order to make a better research on the effectiveness of the benchmark interest rate of money market in China. This paper is divided into four parts. The first part is the first chapter of this paper introduces the background, our country money market general situation at home and abroad of the benchmark interest rate and the benchmark interest rate as the intermediate target of monetary policy.The second part introduces the channels of monetary policy transmission, and introduces the price adjustment tool benefits when the number adjustment tool is not enough. The third part is chapter three, it introduces the benchmark interest rate properties and the basic conditions,then analyzes the particularity of the money market of our country. and we make different attempt of the benchmark interest rate, It compare the advantages and disadvantages of various interest rates as the benchmark interest rate. The fourth part is chapter four, is the focus of this paper, It examines SHIBOR as the benchmark interest rate in our currency market analysis, and to prove its feasibility. At the same time, interest rate marketability quotation of more-than-three-month SHIBOR is insufficient.LPR should act as the benchmark interest rate in the medium or long term. Then we can realize that SHIBOR and LPR acting as benchmark interest rates in the currency market complement each other. The fifth part is the fifth chapter, since Shibor forms on the basis of LIBOR(London Interbank interbank offered rate). And because the LIBOR Manipulation, accordingly, in this paper, I offer several recommendations to the formation and supervision mechanism of SHIBOR.