Chinese Central Bank Raised Benchmark Interest Rate
POBC raised key one-year lending rate for 0.25% to 5.81%. This was widely expected; I have wrote on this earlier and almost certain there is more of this to come.
Raising interest rates and stalling real-estate prices are a bad cocktail. I will cover China even more extensively next year, as big things could come from here.
Chart 1. POBC 1-Year Benchmark Interest Rate
Additionally, POBC has announced that it will increase lending to agricultural sector and medium and small-size firms to promote changes in the country’s economic structure. Concerning yuan exchange rate POBC Vice Governor Hu Xiaolian said that exchange rate should stay “basically stable” stable.