ID :
191735
Wed, 06/29/2011 - 10:37
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https://oananews.org//node/191735
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China's interest rate hike in the offing: analysts
HONG KONG, June 29 (Yonhap) -- China's central bank may soon announce an interest rate hike as the country's inflation is estimated to have gathered further momentum this month, analysts said Wednesday.
China's State Council Development Research Center, which advises the government, estimated earlier that China's consumer price index (CPI) may have risen as high as 6 percent in June, the highest increase this year. Some market analysts forecast the main gauge of inflation could exceed 6 percent on-year this month.
Watchers said China's recent increase of the yield on one-year central bank bills has added to market expectations that the interest rate hike is imminent.
"From past experience, the bill yield rise is an important signal before the central bank raises the benchmark interest rates," said Shang Fei, an analyst at Huishang Bank.
The central People's Bank of China on Tuesday auctioned 2 billion yuan (US$309.06 million) worth of one-year central bank bills through its open market operations, with the yield rising 9.63 basis points to 3.4982 percent. Last week, the yield on one-year central bank bills rose 9.61 basis points to 3.4019 percent.
The issuance of bills is one of the major tools for the central bank to adjust the banking industry's liquidity through open market operations.
Chen Lan, an analyst at Shanghai-based Guotai Junan Securities, said market participants are watching the central bank's moves closely after the yield of its one-year bills sold on Tuesday far exceeded the benchmark interest rate of one-year deposits, which stood at 3.25 percent.
"The one-year bill yield is about 0.25 percentage point higher than the one-year benchmark interest rate for deposits," said Chen. "The interest rate hike is expected to take place in early July."
The Chinese central bank raised its one-year deposit and lending interest rates by 0.25 percentage point to 3.25 percent and 6.31 percent, respectively, in April. In February, it hiked the interest rates by 0.25 percentage point.
Concerns have been rising that the overheating Chinese economy is adding pressure on the country's inflation.
Chinese Premier Wen Jiabao said Sunday during his visit to Europe that while the overall price level could be controlled below 5 percent this year, there are some difficulties in achieving the 4 percent inflation goal, which was set by the government earlier this year.
ygkim@yna.co.kr
China's State Council Development Research Center, which advises the government, estimated earlier that China's consumer price index (CPI) may have risen as high as 6 percent in June, the highest increase this year. Some market analysts forecast the main gauge of inflation could exceed 6 percent on-year this month.
Watchers said China's recent increase of the yield on one-year central bank bills has added to market expectations that the interest rate hike is imminent.
"From past experience, the bill yield rise is an important signal before the central bank raises the benchmark interest rates," said Shang Fei, an analyst at Huishang Bank.
The central People's Bank of China on Tuesday auctioned 2 billion yuan (US$309.06 million) worth of one-year central bank bills through its open market operations, with the yield rising 9.63 basis points to 3.4982 percent. Last week, the yield on one-year central bank bills rose 9.61 basis points to 3.4019 percent.
The issuance of bills is one of the major tools for the central bank to adjust the banking industry's liquidity through open market operations.
Chen Lan, an analyst at Shanghai-based Guotai Junan Securities, said market participants are watching the central bank's moves closely after the yield of its one-year bills sold on Tuesday far exceeded the benchmark interest rate of one-year deposits, which stood at 3.25 percent.
"The one-year bill yield is about 0.25 percentage point higher than the one-year benchmark interest rate for deposits," said Chen. "The interest rate hike is expected to take place in early July."
The Chinese central bank raised its one-year deposit and lending interest rates by 0.25 percentage point to 3.25 percent and 6.31 percent, respectively, in April. In February, it hiked the interest rates by 0.25 percentage point.
Concerns have been rising that the overheating Chinese economy is adding pressure on the country's inflation.
Chinese Premier Wen Jiabao said Sunday during his visit to Europe that while the overall price level could be controlled below 5 percent this year, there are some difficulties in achieving the 4 percent inflation goal, which was set by the government earlier this year.
ygkim@yna.co.kr
