The People's Bank of China (PBOC) is finalising a provisional regulation to govern operations of the country's first national interbank money market, which will go public next week.
Banking sources said the central bank would release the regulation in the next few weeks to provide a legal framework for a market expected to expand rapidly.
The market is designed to unify interbank lending rates through demand and supply, using a national electronic system. It was launched on a trial basis early in January.
'The draft regulation was passed around for comments by participants recently and should be ready this month or next month,' a Chinese banker said.
When the market goes public, the 54 primary dealers - headquarters of 19 banks and 35 fund-raising centres - will be able to have access to real-time interest rates and trading volume. Short-term money may be raised for seven, 20, 30, 60, 90 or 120 days.
Bank branches take part in the market through their headquarters, unless they are empowered to participate directly through the fund-raising centres.