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September 17th, 2007

Slowing Down China

What could possibly slow down the Chinese economy?  How about interest rates. 

The People’s Bank of China raised interest rates again, four days after China announced that August’s inflation index rose to a 11-year high. Starting Sept. 15, the benchmark one-year lending rate will rise to 7.29%, from 7.02%. The one-year deposit rate will rise to 3.87%, from 3.60%.  The markets had expected the Chinese central bank to raise interest rates for a fifth time before the end of this year. China’s policymakers’ most recent rate hikes—coming three weeks since the last increase—coupled with other measures taken last week, have sent a strong signal to the financial markets that Beijing is willing to take more aggressive action to keep inflation under control.

5 rate hikes in one year? Wow.

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Posted by scott on September 17th, 2007 in Asia News |

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