Five of China's biggest banks announced on Wednesday that they plan to issue up to 19 billion yuan's (3.11 billion U.S. dollars) worth of interbank certificates of deposit (CDs), a response to the country's latest move to liberate interest rates.
China Construction Bank (CCB) and Bank of China (BOC) plan to issue 5 billion yuan of CDs each, while Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC) and China Development Bank each plan an issuance of 3 billion yuan, according to a statement posted with Shanghai Clearing House.
The maturity of the CDs issued by CCB, BOC and ABC will stand at three months. ICBC will launch CDs with a maturity of one month and China Development Bank will issue CDs maturing at six months.
China's central bank on Sunday published guidelines on interbank CDs, a money market instrument that will allow banks to borrow at more stable costs on the interbank market.
The guidelines required financial institutions to report their annual plans for the issuance of deposit certificates to the People's Bank of China before entering the market.
It marks another step by China to relax control on the interest rates market following the country's move in July to scrap the floor limit of lending rates.