In a move to further liberalise foreign currency deposits, China’s central bank said it will remove interest rate ceilings on smaller foreign-currency deposits in Shanghai Free Trade Zone from March 1 as part of long-anticipated financial reforms.

Deposits of less than USD 3 million owned by businesses and agencies registered in the zone or by individuals who have worked in the zone for more than one year will receive the same rate of interest, the Shanghai branch of the People’s Bank of China said Wednesday.

Currently, regulatory caps apply to one-year or other shorter-term deposits in US dollars, Japanese yen, euros and Hong Kong dollars. Deposits worth more than USD 3 million are not subject to ceilings, state-run Xinhua news agency reported.

China launched the Shanghai pilot free trade zone last year as a part of its new set of fiscal reforms to halt the economic slowdown and revitalise the world’s second largest economy.

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