Welcome to Francis Academic Press

Academic Journal of Business & Management, 2022, 4(19); doi: 10.25236/AJBM.2022.041912.

An Effectiveness Analysis of DR as the Benchmark Interest Rate in Money Market


Liming Li

Corresponding Author:
Liming Li

Business School, East China University of Political Science and Law, Shanghai, 201620, China


The lack of capital market product pricing standards caused by the fading out of the old international benchmark interest rates, and the need for domestic interest rate market reforms and transformation of monetary policy frameworks require our country to establish and improve its benchmark interest rate system. In the construction of the benchmark interest rate system, DR interest rate is the top priority. This paper uses the relationship and market share of the three main interest rate types DR, FDR, and SHIBOR from 2017 to 2020 to conduct an empirical study to test the feasibility of DR as the benchmark interest rate of the money market. We found that the DR interest rate can better meet the benchmark interest rate standard in terms of market and fundamentals, but it needs further discussion in terms of robustness. However, it can be said that DR interest rate has passed the benchmark interest rate test and can be used as the benchmark interest rate in our country's money market.


Benchmark Interest Rate, DR, FDR, SHIBOR

Cite This Paper

Liming Li. An Effectiveness Analysis of DR as the Benchmark Interest Rate in Money Market. Academic Journal of Business & Management (2022) Vol. 4, Issue 19: 93-101. https://doi.org/10.25236/AJBM.2022.041912.


[1] F.Q. Cao. To reform and explore the mechanism of SHIBOR under the process of interest rate market operation, Journal of Central University of Finance & Economics, vol. 4 (2014), 28-35.

[2] X.M. Fang and M. Hua. Can SHIBOR become the benchmark interest rate of China’s monetary market? — Empirical analysis based on SHIBOR data during the period of Jan.2007-Mar.2008, Economist, vol. 1 (2009), 86-93.

[3] H.P. Chen and J.P. Dai. Feasibility study of SHIBOR as China's benchmark interest rate, Journal of Management World, vol. 10 (2014), 43-52.

[4] Z.D. Wang. Empirical study on the benchmark interest rate selection for China’s monetary market, Review of Investment Studies, vol. 1 (2012), 27-42.

[5] J.Z. Wang, S.J. Zhao and Q. Wang. The market attributes analysis on SHIBOR as China's benchmark interest rate, Economic Theory and Business Management, vol. 2 (2014), 87-96.

[6] G. Shi and K. Gao. Validity test of the benchmark interest rate based on SHIBOR, Finance & Economics, vol. 10 (2012), 26-34.

[7] Q. Guo, X.Q. Li, Z.G. Fu. The tools of monetary policy and the benchmark interest rates of monetary market: an empirical study based on China, Nankai Economic Studies, vol. 1 (2015), 121-132.