Tuesday, August 18, 2009
China Money Rates Drop as Central Bank Stops Pushing Up Yields
As they say in the UFC, "It's all over now!!" All over for China's rate tightening, that is.
Yes, the People's Bank of China (PBOC) had become sensitive to criticism that it was letting loan growth expand too rapidly. And, yes, it had quietly engineered lower reserve balances and higher market rates over the past few months. However, enough was enough. The Chinese stock market's, recent, 16% decline appears to have sent a signal to that the tightening had gone far enough. Lending will likely remain constant at this level for the forseable future.
So...feel free to sound the "all clear."
China set to resume its rise, pulling the rest of the global economy up with it. And, yes, that means America, too!