Jump to content
House Price Crash Forum
Sign in to follow this  
LazyDay

Chinese Base Credit Rate Up To 5.85%

Recommended Posts

Bloomberg

China joins the U.S. and Europe in raising the cost of borrowing. Concern that the Fed may keep raising rates in the face of strong economic data has pushed bond yields higher and limited gains for U.S. stocks this month.

China's central bank increased its one-year lending rate to 5.85 percent from 5.58 percent, the People's Bank of China said today. The change will be effective from tomorrow, the bank said.

Yields on U.S. 10-year Treasuries were at their highest since May 2002 today.

No this hasn't been mentioned and I thought it was more big news in a week of non-stop pro-HPC news.

World stock markets sharply down today on the back of this news. I wonder why???

Share this post


Link to post
Share on other sites

Bloomberg

No this hasn't been mentioned and I thought it was more big news in a week of non-stop pro-HPC news.

World stock markets sharply down today on the back of this news. I wonder why???

yes I did mention it when it was announced earlier but noone responded

- it seems the Chinese want to stem bad debts. We should take a leaf out of their book.

Share this post


Link to post
Share on other sites

Looks like they are already talking about further hikes:

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

BEIJING (AFX) - The People's Bank of China may raise official interest rates further after yesterday's surprise increase to help curb strong credit and investment growth, the official Financial News said in an editorial.
Although the 27 basis point hike in the key one-year lending rate announced yesterday was not large, the editorial said, "it helps create room for further rate rises."
The paper, which is jointly run by the central bank and major financial regulators, said yesterday's hike will help cool the property sector and prevent industrial overcapacity from worsening.
"The purpose of the increase in bank lending rates is to restrain the rapid growth in credit and investment in an effort to fine-tune the economy," it added.

Looks like an IR hike race with Japan and the US. Could the BoE soon be left in the dust?

Edited by Realistbear

Share this post


Link to post
Share on other sites

Looks like they are already talking about further hikes:

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

BEIJING (AFX) - The People's Bank of China may raise official interest rates further after yesterday's surprise increase to help curb strong credit and investment growth, the official Financial News said in an editorial.
Although the 27 basis point hike in the key one-year lending rate announced yesterday was not large, the editorial said, "it helps create room for further rate rises."
The paper, which is jointly run by the central bank and major financial regulators, said yesterday's hike will help cool the property sector and prevent industrial overcapacity from worsening.
"The purpose of the increase in bank lending rates is to restrain the rapid growth in credit and investment in an effort to fine-tune the economy," it added.

Looks like an IR hike race with Japan and the US. Could the BoE soon be left in the dust?

hang on...isn't this going to reduce chinese demand for commodities and oil, thus reducing inflationary pressures in the pipeline elsewhere in the world......or is that far too simplistic :unsure:

Share this post


Link to post
Share on other sites

hang on...isn't this going to reduce chinese demand for commodities and oil, thus reducing inflationary pressures in the pipeline elsewhere in the world......or is that far too simplistic :unsure:

That's what I reckon. This could spark off some selling in the markets, but I suspect we will see an excellent buying opportunity coming up.

This could be a very good thing IMO.

Share this post


Link to post
Share on other sites

HI WSG

hang on...isn't this going to reduce chinese demand for commodities and oil, thus reducing inflationary pressures in the pipeline elsewhere in the world......or is that far too simplistic :unsure:

Indeed it is going to reduce chinese demand for commosities, and therefore inflation pressures elsewhere and so the need for the rest of the world to raise rates.

Share this post


Link to post
Share on other sites

HI WSG

Indeed it is going to reduce chinese demand for commosities, and therefore inflation pressures elsewhere and so the need for the rest of the world to raise rates.

Are you sure? China's economic growth is not dependent on domestic demand.

Edited by cocacolalight

Share this post


Link to post
Share on other sites

Are you sure? China's economic growth is not dependent on domestic demand.

Surely part of the investment that's building the infrastructure that makes possible the £15 dvd players and the tibetan railway is dependent on borrowing

Share this post


Link to post
Share on other sites

IR hikes are going up because of inflation. The Chinese economy has been overheating and they may have read what happened to the Japanes HPI and Stock Bubble both of which came to grief causing stagnation for 2 decades.

The "Bubble" economies listed by the IMF include ther UK and Ireland where the same kinds of problems exist. Prices out of touch with fundamentals must eventually correct of inflation takes over to achieve eventual equilibrium.

Higher rates elsewhere will draw investment away from economies that offer a lower return or that appear to be entering the down cycle.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.