real-time news and commentary for investors
Friday, Oct 25
China continues down path of market rates
- An arm of the PBOC will begin calculating and publishing a "loan prime rate" each day based on rates charged to the best clients by nine major lenders (one can imagine the prime rate manipulation scandal headlines a decade from now).
- Today's rate printed at 5.71% vs. the PBOC-set benchmark of 6%. "The new rate can be a very useful indicator for economists and analysts to measure credit demand and supply on the ground - a good indicator that did not exist before," says Xu Gao, chief economist at Everbright. He quickly adds he needs more time to determine if these are truly market rates, noting the yuan fixing is supposed to be based on bank quotes, "but everyone knows" the PBOC is pulling the levers.
- China financial ETF: CHIX.
- Broad China ETFs: FXI, GXC, PGJ, YAO, FCHI, PEK, CAF, YXI, XPP, FXP, MCHI, YINN, YANG, TCHI, CHXF, KFYP, CNY, CYB, FXCH.