FREE Forex Trading Course
Deposit $250 in an FXCM Micro account and receive the DailyFX Power Course FREE OF CHARGE. FXCM Micro is a discount brokerage service offering super low spreads, 1k lot sizes, and flexible 400:1 leverage. Click below to learn more.
Currency trading involves risk of loss.
Leverage magnifies both gains and losses.
Ben Simpfendorfer, one of the strategists for the Royal Bank of Scotland in Hong Kong affirmed that Central Bank of China's recent hike in interest rates is a both useful and expected step, but assured that a thightening of a higher level of aggressiveness will be needed this year.
He didn't express his surprise, stating that although the step is a good one ahead, the local authorities will have to prevent overheating growth tightening more aggressively.
Simpfendorfer continued that in the second half of the year there will be a worsening of the level of liquidity and he expects to find a list of increases in the requirement reserve of the bank.
The strategist completed that he wants to witness a clearance of the interest tax imposed on bank deposits.
A raise of 27 basis points of the benchmark was done by the Chinese Central Bank concerning the rates for the lending and the depositing, and this will take effect tomorrow. This was the third move of its kind this year, following a number of 5 increases in the requirement reserve of the bank.
Officials of the central bank noted that these last actions target the stability of the prices and the guiding of the inflation expectations in the country.
19:00
Posted on Jul-26-2007
