Reuters reports that vice central bank governor Liu Guoqiang said that China will deepen its loan prime rate (LPR) reforms and gradually make deposit rates more market-driven.

The PBOC will improve its policy interest rate regime with the seven-day reverse repo rate in open market operations as the short-term policy rate and the medium-term lending facility (MLF) interest rate as the medium-term policy rate, Liu said.

The central bank will also improve its interest rate corridor mechanism, and guide market interest rates to fluctuate around the central bank's policy interest rate, Liu said.

The LPR is set monthly by 18 banks, who submit a monthly quotation by adding a premium over the MLF rate. The PBOC has kept the benchmark lending rate unchanged for 17 months, but speculation is growing it may cut one of its key rates soon to bolster slowing economic growth.