The benchmark interest rate is the interest rate with universal reference function in the financial market. The basic interest rate is a reference index formulated by the People's Bank of China, which aims to maintain the stability of the domestic financial market. The general basic interest rate can be the loan interest rate, the treasury bond interest rate, or the transferable deposit certificate interest rate.
Benchmark interest rate is one of the important prerequisites for interest rate marketization. Under the condition of interest rate marketization, financiers measure financing costs, investors calculate investment returns, and management's regulation of macro-economy objectively require a generally recognized benchmark interest rate level as a reference. Therefore, in a sense, the benchmark interest rate is the core of the interest rate marketization mechanism.