In recent years, the central bank has been making steady efforts to advance the market-based interest rate reform. Two important measures were adopted in 2004. First, the band of interest rate on loans of the financial institutions was widened on January 1, 2004. Second, the upper limit on loan rate and lower limit on deposit rate were removed on October 29, 2004.
At present, there are only two control measures for interest rate, one is the ceiling imposed on RMB deposit rate and the other is the floor set for RMB lending rate.