PBOC Raises Interest Rates Following Fed Hike

People’s Bank of China, China’s central bank raised interest rates on its standing lending facility (SLF) short-term loans by 5 basis points.

People’s Bank of China, China’s central bank raised interest rates on its standing lending facility (SLF) short-term loans by 5 basis points.

PBankofChina

The interest rate for overnight SLF loans will be raised to 3.35 percent from 3.30 percent
Rates for 7-day ncreased by 5 bps each to 3.50 percent
One-month loans will be increased by 5 bps to 3.85 percent.

The PBOC raised its MLF rates by the same amount following the Fed’eral Reserves rate hike by the FOMC yesterday..

From Bloomberg

Further Fed interest rate hikes will have some impact on capital flows, while the overall effect won’t be especially significant because China has already been tightening amid deleveraging efforts, Lillian Li, senior analyst at Moody’s Investors Service, said at a briefing Thursday in Shanghai.

Sun Guofeng, director of the PBOC’s financial research institute, said in a recent speech that emerging market economies should also start monetary policy normalization and exit the easing measures that were put into place to address the global financial crisis.

Source: Reuters, Bloomberg

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