China’s Central Bank, in an effort to rein in the nation’s runaway economy, recently raised the country’s benchmark lending rate by 27 basis points. With most countries, an increase in interest rates would propel the country’s respective currency upward in value, as risk-averse investors would bring capital to that country’s bond markets. In the case of China, however, monetary policy tends to have a pretty negligible effect on the currency, primarily because the Yuan remains pegged to a basket, and its appreciation is being carefully managed by the government.
Read More: China announces 0.27 percentage point increase in key interest rates
Sunday, March 18, 2007
Previous Post
Markets await data, Fed for USD
Next Post
US trade deficit not a concern
Related Posts:
Investors Uncertain about RMBOnly a few weeks ago, investors had made significant bets that China would reverse its official pol… Read More
Will China Fund US Deficit?When all is said and done, the US government will have injected trillions of dollars into the econo… Read More
China’s FX Reserves Near $2 TrillionLast week, China revealed that in the most recent quarter, its economy grew at the slowest pace in … Read More
Central Bank of China Battles Over YuanOver the last couple years, the Central Bank of China has built up a treasure trove of foreign exch… Read More
Could the RMB Fall? Since China revalued the Yuan in July 2005, it was considered a foregone conclusion that the cu… Read More
China’s FX Reserves FallAnyone curious about whether China is intentionally allowing the RMB to depreciate, need look no fu… Read More
0 comments: