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.


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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