From Bloomberg News:
China will probably raise interest rates by the end of September to cool the economy after inflation accelerated to a 10-year high and record trade surpluses pumped cash into the financial system.
Rates will increase this quarter for the fourth time since March, 11 of 16 economists in a Bloomberg News survey said yesterday after the final economic data for July. Most expect the benchmark one-year lending rate to rise to 7.11 percent from 6.84 percent. The deposit rate is likely to be raised to 3.6 percent from 3.33 percent. Central bank Governor Zhou Xiaochuan ‘s efforts to tame inflation are complicated by inflows of export cash and a pork shortage that’s pushed up food prices. July’s data showed the fastest expansion of money supply in 14 months and little cooling of growth in factory spending and industrial production. [Full Text]
Click here to see the CPI issue in China recently.
[Image:Zhou Xiaochuan, governor of the People’s Bank of China, from Bloomberg.]
