China Development Bank and China Everbright Bank completed the country's first RMB interest rate swap transaction in Beijing Thursday.

The interest rate swap transaction refers to periodic payments under agreement calculated, based on fixed and floating interest rates. It is an important indicator of the maturity of the financial market.

Experts believe that the service will reduce borrowers' risk in the financial market, for example, with the housing loans.

Chinese banks long only provided floating mortgage rate. As the central bank raised the interest rate in October 2004, many consumers now have to pay more than they expected for the housing loans.

Based on the interest rate swap transaction, China Everbright Bank launched the country's first fixed mortgage rates service for housing loan borrowers. The bank transfer the consumer's risk to the capital market.

(Xinhua News Agency February 10, 2006)