Report: China may raise interest rates twice in second quarter

11:12, March 31, 2011      

Email | Print | Subscribe | Comments | Forum 

A report released by the International Financial Research Institute of the Bank of China predicted that China's central bank will raise interest rates once or twice in the second quarter of 2011. The relatively higher price increases and the continuous negative interest rates are the direct reason of rate hikes.

The Bank of China has raised the base rate of RMB deposits and loans in financial institutions three times since October 2010. Bank of China's research team pointed out that China's prices are in the critical period of transforming from structural increases to overall increases.

The consumer price index (CPI) and producer price index (PPI), which had previously seen alternating and cyclical fluctuations, shifted toward a synchronous rise in the second half of 2010. This has increased the pressure on future price increases. Therefore, China's monetary policy will return to being stable.

In addition to rate hikes, the report predicts that the deposit reserve ratio may also be adjusted in the first half of 2011 to inhibit excessive commercial bank loans and manage excess liquidity in the market. However, as the deposit reserve rate has reached 20 percent, a record high, the increase space is relatively limited.

By Li Yancheng, People's Daily Online

 
 
     
 
 
 
     
 
 
 
  Weekly review  
 
 
 
     
 
 

(Editor:王寒露)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Survey for 2011 NPC and CPPCC Sessions
  • Focus On China
Major headlines
Editor's Pick
  • Dolphins from Japan tested for radiation at Changsha
  • Carter wraps up visit to Cuba, calls for lifting U.S. embargo on Cuba
  • Sharon Stone hosts concert to honour Gorbachev
  • "GMXY since 1996" show at China Fashion Week
  • Candy dispensers for William &Kate wedding
  • Justin Bieber holds concert in Antwerp, Belgium
Most Popular
Hot Forum Dicussion