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The central bank of China is bringing up it’s lending and deposit rates at banks by 27 points in an attempt to maintain stability of prices.
These increases imposed by the central bank of China will bump up one year deposits to around 2.79 percent and year long lending rates will get bumped up to 6.39 percent.
A statement on the central bank’s website reported that the increases in rates will be beneficial to not only money but additionally to credit and investments. It will aide in stabilizing the financial system and also help to ensure it’s continued development.
This very surprising move arrives at growing concerns about lending rates and data that is showing a potential pick up in economic activities at the start of the year even though the Chinese New Year is particularly quiet.
Although there has been no information about the estimated target for new loans in 2007 the central bank more then reached it’s estimate for the previous year.
It has been made tremendously clear that Beijing intends on having a controlling interest concerning the supply of credit this year.
The Chinese government reported that the trade surplus rocketed to 23.76 billion in United States dollars in the month of February even with the Chinese New Year falling in the middle of the month.
A raised inflation pressure combined with a increase in the liquidity of the banking system have occurred due to strong investment overflows and large trade surpluses being converted into local currency.
20:38
Posted on Mar-20-2007
