China raises the interest rates 0,25 % for the first time from 2007
20-10-2010 golden marketChina raises the interest rates for surprise and puts pressure to the bags.
The hardening of the Chinese monetary policy surprises to the market.
China increased 0,25 % the basic interest rates on Tuesday, the 19-10-2010th, now they are located in 5,56 %.
It is the first increase from 2007, before the crisis, and destined to cool the inflation and the real estate agency.
The Popular Bank of China (PBC) announced this measurement, which comes into force on the 20-10-2010th, together with the increase of the type of bank deposits of another quarter of point up to 2,50 %.
It is a question of the first change of the interest rates of the Chinese Government before the pressures of the inflation, which in August, 2010 3,5 % interannual reached and which perspectives for September are even higher.
The buoyant economic recovery (China grew 10,3 % in the 2nd trimester 2010) is shooting the prices over the due thing.
In this context, there have been exceeded loosely the targets marked by the Chinese Government at the beginning of year of an advance of the GDP of 8 % and an IPC of about 3 %.
The new adjustment takes place in full battle of the communist diet to avoid an excessive liquidity, which leads to the creation of speculative bubbles.
Peking had refused up to the date to get dearer the money, although it had fought the inflation with 5 increases in what it goes of year of the coefficient of bank reservations, which has gone off up to 18 %.
This increase of 25 basic points is a notice that will have a limited impact, since there would be necessary like minimum another 2 increases of the same scope to reverberate really in the quantity of circulating money in China and in a strengthening of the yuan, the Chinese currency.
In the middle of the western pressures, China announced on June 19 that flexibilizaba the quotation of the yuan from this moment, but the USA denounces that the currency is still artificially a casualty.
From the last months, China keeps his currency artificially low, favoring his exports and harming the trade surplus of countries like the United States and Japan, which have initiated a protective counterattack that happens for the devaluation of his currencies.
The USA has considered to accuse Peking of manipulating formally his currency, what it would force to bilateral negotiations or, in last end, to come to the International Monetary Fund (IMF), what might end in a trade war between two potency.
Yin Jianfeng, of the Institute of Finance and Banking of the Academy China of the Social sciences, defended that the increase obeys two spheres: the national ambience and the international frame.
“On the one hand, the Government wants to fight the bubbles of the real estate and stock-exchange sector, simultaneously that orders a sign to the international markets remembering that his monetary policy is opened”, pointed Yin.
A recent Citigroup report indicates:
“At external level he supposes a clear message to the international authorities on the relative stability of the yuan.”
Nevertheless, Citi also clarifies that the types increase is too small so that it causes big changes and perturbations.
Between other things, the debt sales are "light" and the situation continues “without changes in the risk European country”.
For his part, Marian Fernández, person in charge of Strategy of Inversis Banco, proves to be a skeptic on an appreciation of the yuan, since the currency is taken control, “out of a free fluctuation”.
The measurement of the Chinese authorities would try “to avoid bubbles in the assets”, expresses Marian Fernández.
Also, he would suppose a “reordering of his growth”, till now centred on the exterior demand, with a commercial balance very positive product of a relatively low yuan.
In this sense, the types increase also is directed to the home demand and it should stimulate the comeback of the investors to the country.
The Chinese prime minister, Wen Jiabao, announced in a few declarations gathered by the official agency of news Xinhua that
“to overcome completely the world financial crisis and to carry out a sustainable development it is necessary that the international community continues the way of the mutual benefits and the common development” and that “it intensifies the reform of the world economic and financial systems”.
Banco Popular of China (PBC): www.pbc.gov.cn
19-10-2010
