The removal of the deposit rate ceiling completes interest rate liberalization, though it will take longer for rates to be fully determined by market, said Wang.
To that end, Wang suggests breaking implicit credit guarantees, reforms of SOEs and financial sectors, and a more price-based monetary policy.
HELPING INTERNATIONALIZATION OF RMB?
The rate move came after deputy PBOC governor Yi Gang's remarks at the IMF annual talks in Lima last week that China hopes the RMB will be included in the special drawing rights (SDR) basket later this year.
The PBOC issued its first offshore RMB note in London on Wednesday,worth 5 billion yuan at a rate of 3.1 percent, due in 2016. It has also extended an agreement on a reciprocal currency swap scheme with the Bank of England.
The PBOC opened the onshore inter-bank FX market to foreign central banks, sovereign wealth funds and multilateral financial institutions on Sept. 30. Paul Mackel, head of EM FX strategy at HSBC, described the PBOC activity as addressing "some" of the IMF's initial considerations for the next SDR review.
"There have also been several other announcements that are not directly targeted at the upcoming SDR review, but are nevertheless supportive of the RMB playing a more important global role over the medium term, be it in asset management, the invoicing of goods and services trade, FX trading, or as a funding currency," Mackel said in a report.
Earlier this month, the first phase of the China international payment system was launched in Shanghai. Also on Oct. 8, the central bank announced that China's official statistics will conform to special data dissemination standards (SDDS), an IMF statistical system to improve transparency.
On October 6, SWIFT said that the RMB overtook the Japanese yen in August to become the world's fourth most important payment currency.
The SDR is currently made up of the dollar, euro, Japanese yen and the British pound. The yuan failed to be included in 2010 when the IMF said the currency did not meet the "freely usable" criteria.
