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Chinese repo rates jump as PBOC looks to fight inflation

  • The People Bank of China has refrained from injecting liquidity into money markets for a third consecutive session, adding to concerns that it's clamping down on inflation, which hit 3.1% in September.
  • The PBOC's lack of action has meant that 58B yuan ($9.53B) has drained from the country's interbank market this week. And since the week of September 30, the PBOC has drained over 157B yuan.
  • In reaction, China's seven-day repurchase rate - a benchmark for short-term funds - rose 65 basis points, the biggest rise since July 29, to 4.67%.
  • Meanwhile, the city of Beijing is to impose further restrictions to try to cool the buoyant housing sector, although it's also going to try to increase supply for middle-income families.
  • The PBOC's actions helped Chinese stocks drop 0.8%.
  • ETFs - Stocks: FXI, GXC, PGJ, YAO, FCHI, PEK, CAF, YXI, XPP, FXP, MCHI, YINN, YANG, TCHI, CHXF, KFYP, HAO, ECNS. Bonds: DSUM, CHLC. Currency: CNY, CYB, FXCH
Comments (1)
  • Mattster
    , contributor
    Comments (162) | Send Message
     
    China is protecting its middle class. If the USA does not do the same China will become the new great world power and the USA will be dragged down by increasing poverty and socialization for the benefit of a few elites.
    24 Oct 2013, 09:48 AM Reply Like
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