A Study On The Selection Of The Benchmark Interest Rate In Our Country-based On The Perspective Of The Interest Rate Transmission Mechanism

On Oct.24^th,2015,the People's Bank of China declared that it wouldn't set depositrate floating ceiling for commercial banks and rural cooperative financial institutions any more.The abolition of the administrative restrictions on interest rate fluctuations does not mean that the central bank will let the interest rates float freely,but will rely more on market-based monetary policy instruments and transmission mechanism to regulate interest rates.At the same time,the monetary policy regulation is being trsnsmitted from the one based on quantitative to the one based on price.Therefore the benchmark interest become more and more imprtant.At present,China's monetary market benchmark interest rates are:Shibor,the basic interest rate of loans,repurchase fixed interest rates,fixed deposit interest rate and so on.In different sub markets,the benchmark interest rate is different,and the interest rate system in China lacks the core benchmark interest rate which can play the basic interest rate in the whole money market.The domestic academic circles agree that the benchmark interest rate is the market interest rate which has a dominant role in the whole interest rate system and has an impact on other interest rates,learning from the experience of the developed countries.But,they have different opinions on which interest rate can serve as the benchmark interest rate in China.According to the actual situation of monetary market in China,this paper focuses onthe interbank lending market and Repo market,and find out three representatives of money market interest rates.Then,with the aid of empirical test,this paper analyzes the three representative rates to choose the most suitable one as the benchmark interest rate.Effect of conducting determines which interest rate should be the benchmark interest rate in China's monetary market.In this paper,the interest rate transmission process is divided into three small processes,and then we sum up four attributions the monetary market benchmark interest rate should have.Then carry on the comparative analysis of Shibor,Chibor and Repo in order,taking these four attributions as the standard.Through a series of empirical analysis of the correlation coefficient,Granger causality test,impulse response analysis,the results show that the Shibor is the most suitable one to be our country's monetary market benchmark interest rate.Finally,this paper puts forward some suggestions on how to cultivate the benchmark interest rate of monetary market from three aspects.