China formally unveiled a new set of market-oriented interest rates Thursday, according to the central bank.

The launch of the Shanghai Interbank Offered Rate, or Shibor, is the result of efforts to further liberalize interest rates and foster a benchmark interest rate system for China's money market, the People's Bank of China (PBOC) said in a statement posted on its official website Wednesday.

"The move is good in that it will rely on a market-based mechanism to push interest rate liberalization," said Yang Fan, a professor at the Business School of the China University of Political Science and Law.

According to the statement by the PBOC, the rates will be determined on the basis of the daily quotes for 16 maturities of interbank rates, ranging from overnight to one year, provided by 16 commercial banks that are major dealers or market makers in the money market.

Eight of those quotes will be open to the public, while the rest will be kept for reference, according to a PBOC circular.

The Shanghai-based National Interbank Funding Center is entitled to calculate and publish the rates, which will be released every day on the official Web site: www.shibor.org, according to the statement.

The statement did not name the 16 banks, but according to the PBOC circular in September, they include three foreign banks: The Shanghai branches of Deutsche Bank, HSBC and Standard Chartered Bank.

Analysts said the Shibor is expected to help develop derivatives products, such as interest rate swaps, which require support from benchmark rates of longer and more flexible terms.

Currently there are only two major reference rates in the market: The seven-day weighted average interest rate for repurchasing treasury bonds and the rate for one-year central bank bills.

The Shibor will also provide a sound market platform for the central bank's maneuvers in the money market, according to Fu Yong, a researcher at the China Center for Economic Studies, Fudan University.

The new benchmarks will provide a sound "barometer" for judging the reasonability of liquidity in China's money market, Ha Jiming, chief economist of the China International Capital Corporation, was quoted by the China Securities Journal as saying.

Ha suggested that the central bank should strengthen the importance of the Shibor so dealers would accept it.