Chinese Central Bank Raised Benchmark Interest Rate

POBC raised key one-year lending rate for 0.25% to 5.81%. This was widely expected; I have wrote on this earlier and almost certain there is more of this to come.

Raising interest rates and stalling real-estate prices are a bad cocktail. I will cover China even more extensively next year, as big things could come from here.

Chart 1. POBC 1-Year Benchmark Interest Rate

Additionally, POBC has announced that it will increase lending to agricultural sector and medium and small-size firms to promote changes in the country’s economic structure. Concerning yuan exchange rate POBC Vice Governor Hu Xiaolian said that exchange rate should stay “basically stable” stable.

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This entry was posted on Monday, December 27th, 2010 at 5:18 am and is filed under China, Commodities. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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