On February 26, Shanghai Headquarter of the People's Bank of China (PBOC) announced that the interest rate cap on small foreign-currency deposits in Shanghai Free Trade Zone (FTZ) will be removed on 1st March. Once the cap is removed, Shanghai FTZ will be the first to liberalize interest rates on foreign currency deposits. ANBOUND research team thinks that the short term impact is not huge. Since the major central banks in the world are keeping low interest rate policy, commercial banks will not substantially increase the interest rate for foreign-currency deposits even if the cap is removed. China Central Bank aims to gain experiences via Shanghai FTZ, test the market and lay the foundation to further promote interest rate liberalization.