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Rate rises likely in second half: analysts
By Zhang Fengming |
January 21, 2010, Thursday
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Online Edition
Online Edition
INTEREST rate rises are likely in the second half of this year as measures are expected to curb excessive credit growth, economists said today.
Interest rates rises could hit in the second quarter if inflation rises beyond 3 percent by the midle of this year, they said.
More frequent measures are expected amid a moderately tighter monetary policy to avoid economic over-heating this year, said Qu Hongbin, chief economist of HSBC China.
These include further increase in the reserve requirement ratios for banks and the central bank bills issuance rates.
"We believe controlling the pace of credit growth will remain a key monetary policy objective in the next few months," said Barclays Capital.
China raised bank reserve ratios to 16 percent for large banks and 14 percent for smaller banks on Monday this week.
China's consumer price index, the main gauge of inflation, rose 1.9 percent year on year in December, the fastest growth since November 2008.
Interest rates rises could hit in the second quarter if inflation rises beyond 3 percent by the midle of this year, they said.
More frequent measures are expected amid a moderately tighter monetary policy to avoid economic over-heating this year, said Qu Hongbin, chief economist of HSBC China.
These include further increase in the reserve requirement ratios for banks and the central bank bills issuance rates.
"We believe controlling the pace of credit growth will remain a key monetary policy objective in the next few months," said Barclays Capital.
China raised bank reserve ratios to 16 percent for large banks and 14 percent for smaller banks on Monday this week.
China's consumer price index, the main gauge of inflation, rose 1.9 percent year on year in December, the fastest growth since November 2008.
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