Jan. 7 (Bloomberg) -- Chinaâs central bank sold three-month bills at a higher interest rate for the first time in 19 weeks after saying yesterday that it will target a âmoderateâ expansion in lending in the fastest-growing major economy. The Peopleâs Bank of China offered 60 billion yuan ($8.8 billion) of bills at a yield of 1.3684 percent compared with 1.3280 percent on Dec. 29, according to a statement posted on its Web site today. The increase added to signs that the government wonât allow a repeat of last yearâs record expansion in credit. Policy makers need to support ârelatively fastâ economic growth while stabilizing prices and managing inflation expectations, the Peopleâs Bank of China said in a statement after an annual work meeting. âItâs definitely a signal that the central bank is tightening liquidity,â said Shanghai-based Jiang Chao, a fixed- income analyst at Guotai Junan Securities Co., the nationâs largest brokerage by revenue. âThe central bank may want to show its determination to control inflation. Also, the rising yield is used to prevent excessive growth in bank lending.â http://www.bloomberg.com/apps/news?pid=20601087&sid=aprxRgyf9eGw&pos=3 ...
People's Bank of China tips yield on three-month bills higher for first time since August,a move potentially setting up a rate hike. It's over with cheap money.
Why would a country growing at such a fast pace, at that time worried about the global recession, throw $586 Billion into their economy, the GDP figures out of China are based off of incredible amounts of stimulus yet no one even mentions a word of it when they announce that China's GDP is growing nearly 10%+. The stimulus they pushed through their system has created demand for everything, it needs to end somewhere, the amount of stimulus in these global markets is mind boggling. Time to pull the stimulus away and see if these economies around the world can experience real growth. The economies are on steroids at the moment. http://www.nasdaq.com/newscontent/2...ange-in-monetary-policy.aspx?storyid=19543685 China sought to stimulate growth in its economy with little regard for the potential effects of inflation. The government's $586 billion stimulus package, in concert with its provision of easy credit, helped spur economic expansion and ensured that China continued to be the world's fastest-growing economy. According to the Asian Development Bank, Chinese growth was 8.2 percent last year and will be 8.9 percent in 2010. The U.S. economy, by contrast, grew just 2.2 percent in the third quarter of 2009.