Central Bank Tightens Policy A Notch, But What Is It Saying About The Yuan?

Pay less notice to the latest monthly industrial production and retail sales figures — both up 16% in October from a year before, with the trade surplus almost doubling from September, to $24 billion, as the contraction in exports eased to its slowest pace this year — and more to the subsequent statement by the [...]

Central Bank Reins In Commercial Bank Lending

With warnings that bubbles are swelling in China’s stock and property markets becoming more common by the day, the central bank is starting to drain off some of the liquidity engorging prices. The big state-owned commercial banks cut back their new lending sharply in July, to 168 billion yuan from June’s 497 billion yuan in [...]

Zhou Bangs On About The SDR As World Currency

The People’s Bank of China has found a drum and continues to beat it. In its annual financial stability report, the central bank again calls for a super-sovereign currency to replace the dollar. The bank’s head, Zhou Xiaochuan, has been a cheerleader for this course of action, and caused a stir earlier this year when [...]

China’s Reserves Swell More Slowly

The country’s foreign exchange reserves grew in the first quarter by less than they did in the fourth quarter of last year. Reserves stood at $1.95 trillion at the end of March, the People’s Bank of China reports, up $7.7 trillion since the end of December, when they had shown a more than $40 billion [...]

China, A New Global Currency And The IMF As The World’s Central Banker

Our man in New York tells us that U.S. Treasury Secretary Timothy Geithner was caught off guard by a question at a Council On Foreign Relations discussion there on China’s recent trial balloons about the need for a global reserve currency that wasn’t the dollar. This was odd, our man reports, as Geithner’s boss, the [...]

Central Bank Optimistic In Latest Growth Forecast For 2009

It may be an exercise in wishful thinking, but the People’s Bank of China’s research group is forecasting 8% growth for the economy this year.
That is the much quoted level needed to create the jobs that will sop up new entrants to the labor market, and thus avoid the much feared social instability. The forecast [...]

China Cuts Interest Rates For Fourth Time

China’s newly announced cut in interest rates, to 5.58% from 6.66% for the central bank’s one-year benchmark rate, to take effect on Thursday, is the fourth cut since mid-September and biggest since the Asian financial crisis in 1997. The People’s Bank of China has also lowered the reserve requirements it imposes on banks, by 1% [...]

China Eases Bank Restrictions

Confirmation from the central bank that the strict limits on bank lending have been relaxed to help sustain rapid economic growth. People’s Bank of China spokesman Li Chao also told Xinhua that China must be flexible over monetary policy. Banks’ reserve requirement ratios are being left unchanged, though, as, Li said, there was ample liquidity [...]

Tightening The Monetary Policy Wrench

China’s tenth turn of the bank reserves ratio wrench was more vigorous than the previous ones but just as likely to be as ineffective. The People’s Bank of China said today that it will raise from December 25 the proportion of deposits that banks must hold in reserve by one percentage point to 14.5%. The [...]