China's entry into the tightening cycle in January CPI inflation pressure or high rise

 Laying the foundation for the whole year price controls in China has entered the interest rate cycle

People's Bank of China, 8
announced late date since 9 financial institutions raised 1-year benchmark deposit and lending rate by 0.25 percentage points, other deposit and lending interest rate adjusted accordingly. Adjusted 1-year deposit rate to 3%, 1-year lending rate to 6.06%. This is the first time since China's central bank to raise interest rates this year is the third time since 2010, plus interest. The central bank on Oct. 19 last year and December 25 to raise interest rates twice.

1   CPI increase or higher inflation pressure

analysts believe the central bank chose this node just after the Lunar New Year to raise interest rates to cope with the current inflationary pressure can not be ignored.

Dean of the Central University of Finance Zhang Liqing said.

Shu Song said.

interest rate increase was announced, indicating an increase in January CPI will be higher than last December, the recent inflationary pressures can not be ignored.

said.

National Bureau of Statistics data show that CPI rose significantly last year, the rise of the fourth quarter, which in November rose more than 5%, a record high of more than two years, in response to inflationary pressures, the fourth quarter of last year, the central bank to raise interest rates twice.

upstream commodity prices, domestic liquidity is still ample, international factors such as rising commodity prices will push inflation higher in the first half.

recently released the People's Bank of China,

can knock down the higher interest rates, inflation expectations

rate hike, the residents of 3-year deposit rate by 4.5%, 5-year deposit interest rate of 5% increase respectively over the previous 0.35 and 0.45 percentage points, the experts pointed out that the deposit interest rate increase will help protect the depositors interests of the society to some extent reduce inflationary expectations.

expectations.

current interest rates still low

Analysts pointed out that the same with a number of emerging market countries, China has entered the current interest rate cycle.

Photo its rank and file that the principals.

over a period of time, the world's major economies, monetary policy has divided: on the one hand, developed economies still stick to a low interest rate monetary policy; the other hand, some emerging market countries have raised interest rates, India, Brazil, South Africa Central Bank in response to growing inflationary pressures, interest rates announced on many occasions.

China's central bank governor Zhou Xiaochuan has
also pointed out that the central bank will stabilize the overall price level in a more prominent position. In the use of monetary instruments, will continue to use interest rates, deposit reserve ratio, open market operations and other price and quantity instruments.

running costs, will be brought to the bank and real estate market some risk, so many interest-rate hikes are not likely to, how to handle the fast and steady economic development, economic restructuring, management of inflation expectations among the three the relationship between the monetary authorities will always test the regulation of wisdom.