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Analysts predict China to hike rates in days
By Wang Yanlin |
December 7, 2010, Tuesday
|
Online Edition
Online Edition
CHINA is entering a "sensitive" period for a possible interest rate increase, with an upcoming meeting of policy makers and the release of key economic data for November, analysts said today.
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This weekend, China will hold the annual Central Economic Work Conference, which may unveil detailed measures of a prudent monetary policy stance. Coupled with the scheduled release of inflation rate on Monday, it is likely that the People's Bank of China, the central bank, will take a decisive move to tighten policies, analysts said.
"China has announced to shift to a prudent monetary policy stance, and it may be materialized into an interest rate increase this weekend or next week," said Li Huiyong, an analyst at the Shenyin & Wanguo Securities Co.
China's Consumer Price Index, the main gauge of inflation, surged 4.4 percent from a year in October, the fastest in 25 months. It has made the real interest rate a negative one for 10 consecutive months.
Li estimated the inflation rate will further accelerate to 5.1 percent in November, prompting the central bank to lift the interest rate.
Lu Zhengwei, an analyst at the Industrial Bank Co, was a bit more conservative and forecast the CPI to jump 4.8 percent year-on-year in November.
"The sensitive period for an interest rate increase may last for a week, from today to December 18," Lu said.
.
This weekend, China will hold the annual Central Economic Work Conference, which may unveil detailed measures of a prudent monetary policy stance. Coupled with the scheduled release of inflation rate on Monday, it is likely that the People's Bank of China, the central bank, will take a decisive move to tighten policies, analysts said.
"China has announced to shift to a prudent monetary policy stance, and it may be materialized into an interest rate increase this weekend or next week," said Li Huiyong, an analyst at the Shenyin & Wanguo Securities Co.
China's Consumer Price Index, the main gauge of inflation, surged 4.4 percent from a year in October, the fastest in 25 months. It has made the real interest rate a negative one for 10 consecutive months.
Li estimated the inflation rate will further accelerate to 5.1 percent in November, prompting the central bank to lift the interest rate.
Lu Zhengwei, an analyst at the Industrial Bank Co, was a bit more conservative and forecast the CPI to jump 4.8 percent year-on-year in November.
"The sensitive period for an interest rate increase may last for a week, from today to December 18," Lu said.
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