By Li Hongmei

The liberalization of the deposit rate is a significant and critical stage in the deepening financial reforms in China, a former vice governor of the central bank said at the China International Finance Forum yesterday in Shanghai.

The liberalizing of the deposit rate is the last step in liberalization of interest rates in the country, Ma Delun, the People's Bank of China's former vice governor, said.

He also touched on other aspects of China's ongoing developments in the financial sector, including exchange rate reform and capital account opening.

"There's a rapid growth in cross-border trade transactions that were settled in yuan," Ma said. "The total cross-border trade settlement in yuan has reached 8.6 trillion yuan (US$1.4 trillion) since 2009. About 220 countries and regions have conducted cross-border yuan transactions."

He said the PBOC is urging financial institutions to extend offshore loans in yuan to promote yuan outflows.

Ma said the opening of yuan capital accounts in Shanghai's pilot free trade zone reflects the primary objective of deepening financial reform in the country by using market forces to optimize resource allocation.

"This is our next focus of reform initiatives," he said.