How China’s Interest Rate Toolbox Is Evolving and Why

The approaching demise of the discredited London Interbank Offered Rate (Libor) is prompting major central banks globally to create new benchmarks. The People’s Bank of China wants to elevate another key rate in the interbank market — the Depository-Institutions Repo Rate (DR) — to benchmark status, partly to align itself with the shift in international practices. While details are still limited, the idea has attracted financial market interest.