Commercial banks should be offered a free hand in setting lending rates, Shanghai Securities News reported Monday, citing Li Lihui, president of the Bank of China.

A cancellation of the lowest limit of the floating range of lending rates should be the next step for the nation's interest rate liberalization reform, Li told a finance renovation forum, according to newspaper reports.

China has already loosened its grip on the interest rate regime. These actions are all part of the wider strategy to meet the government's commitment to further ease restrictions on the country's financial sector, which has long been criticized for being too restricted.

Li also urged further relaxation of the foreign exchange rate regime to achieve a more balanced yuan value.

Global Times