China's banks to offer 19 bln yuan of deposit certs Thurs - statement

Tuesday, 10 Dec 2013 | 9:30 PM ET

SHANGHAI, Dec 11 (Reuters) - Five Chinese banks will sell 19 billion yuan ($3.13 billion)of negotiable certificates of deposits (NCDs) on Thursday, the official Shanghai Clearing House announced on its website, ushering a new phase for the liberalisation of Chinese interest rates.

The banks, which include the Agricultural Bank of China, Bank of China, China Construction Bank, China Development Bank and the Industrial and Commercial Bank of China, will offer tenors of one month, three months and six months, according to the announcement on Wednesday.

The six-month tenor will be priced at 97.450 yuan, it said, while the three-month tenor will price at 98.734 yuan and the one-month at 99.5691 yuan.

A type of investment that gives buyers fixed interest payouts, NCDs are a step towards relaxing China's control over rates as they let buyers and sellers negotiate prices between themselves.

The next expected step is for Beijing to implement a deposit insurance scheme, with the ultimate goal of letting deposit rates float freely.

Interest rates in China are controlled by the government, which instructs banks how much to pay for deposits and how much to lend, in part to protect their profit margins.

(Reporting by Pete Sweeney, Laura Yan and Steven Bian; Editing by Shri Navaratnam)

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