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发帖数: 5516 | 1 China Cuts Interest Rates for First Time Since 2008
By Bloomberg News - Jun 7, 2012 9:20 AM ET
Timothy Bitsberger on China, Global Central Banks
China cut borrowing costs for the first time since 2008 and loosened
controls on banks’ lending and deposit rates, stepping up efforts to combat
a deepening slowdown as Europe’s debt crisis threatens global growth.
Enlarge image China Cuts Interest Rates to Boost Growth as Inflation Eases
Members of China's military police force stand guard outside the People's
Bank of China in Beijing. Photographer: Sim Chi Yin/Bloomberg
China Rate Cut `Unsettling,' IoD's Leach Says
Play Video
June 7 (Bloomberg) -- Graeme Leach, chief economist at the Institute of
Directors, and Tom Vosa, director of economic research at National Australia
Bank Ltd., talk about China's decision to cut its interest rate for the
first time since 2008, Bank of England monetary policy and Spain's bond sale
. They speak with Guy Johnson, Francine Lacqua and David Tweed on Bloomberg
Television's "City Central." (Source: Bloomberg)
China Cuts Rates to Encourage Spending, Growth
Play Video
June 7 (Bloomberg) -- Bloomberg's Mike McKee reports that China cut interest
rates for the first time since 2008, stepping up efforts to combat a
deepening economic slowdown as Europe’s worsening debt crisis threatens
global growth. He speaks on Bloomberg Television's "Inside Track." (Source:
Bloomberg)
More China Rate Cuts in Third Quarter, Green Says
Play Video
June 7 (Bloomberg) -- Stephen Green, head of greater China research at
Standard Chartered Bank Plc in Hong Kong, talks about China's decision to
cut interest rates for the first time since 2008. He speaks with Sara Eisen
on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Enlarge image China Cuts Interest Rates for First Time Since 2008
The Chinese flag flies outside the People's Bank of China in Beijing.
Photographer: Nelson Ching/Bloomberg
The benchmark one-year lending rate will drop to 6.31 percent from 6.56
percent effective tomorrow, the People’s Bank of China said on its website
today. The one-year deposit rate will fall to 3.25 percent from 3.5 percent.
Banks will get extra freedom to set the amounts they pay on deposits and
charge for loans in a move UBS AG calls a “milestone.”
European stocks and U.S. index futures extended gains as China’s move added
to an Australian rate cut this week and expressions of concern from
European and U.S. central bank officials that fanned expectations for more
stimulus. The announcement, two days before China is due to report inflation
, investment and output figures, may signal that the economy is weaker than
the government expected.
“This will be the beginning of a rate cut cycle and there will be at least
one more reduction this year,” said Shen Jianguang, a Hong Kong-based
economist with Mizuho Securities Asia Ltd. “The data to be released over
the weekend must be very weak and inflation must have eased sharply.”
The MSCI All-Country World Index added 0.9 percent at 8:31 a.m. in New York.
The Stoxx Europe 600 Index jumped 1.4 percent, extending yesterday’s
biggest rally in six months, while Standard & Poor’s 500 Index futures
advanced 0.8 percent. Oil gained 1.4 percent in New York, reversing a 0.6
percent drop.
‘Unprecedented’ Reform
Banks can offer a 20 percent discount to the benchmark lending rate, the
PBOC said, up from a previous 10 percent. Lenders will for the first time be
able to offer savers deposit rates that are up to 10 percent higher than
the official benchmark rate.
Wang Tao, chief China economist at UBS in Hong Kong, who previously worked
at the International Monetary Fund, described the deposit-ceiling move as “
unprecedented” and a “milestone for interest-rate liberalization.”
U.S. Treasury Secretary Timothy F. Geithner has pressed China on the deposit
-rate ceiling, calling as recently as April 26 for an increase to help give
savers higher returns and stoke consumer spending. The practice of keeping
the deposit rate below the pace of inflation had forced households to “save
excessively,” he said in a speech in San Francisco.
Slower Growth
The central bank last reduced benchmark interest rates in late 2008, when
the government unveiled a 4 trillion yuan ($586 billion at the time)
stimulus package to counter the effects of the global financial crisis.
Interest rates have been unchanged since an increase in July 2011.
Australia’s central bank cut interest rates two days ago, citing Europe’s
crisis and moderating growth in China. The European Central Bank yesterday
held its key rate at a record low, with President Mario Draghi saying that
officials stand ready to act. Today the Bank of England kept its benchmark
at a record low, while refraining from expanding a stimulus program.
In the U.S., Federal Reserve Vice Chairman Janet Yellen said yesterday that
the U.S. economy “remains vulnerable to setbacks” and may warrant
additional monetary stimulus. Dennis Lockhart, president of the Fed’s
Atlanta bank, said extending Operation Twist, a policy of buying longer-term
bonds, is an “option on the table.”
Lending Cools
In China, today’s move signals policy makers’ concern at weakness in
demand for loans. Three bank officials told Bloomberg News last month that
the nation’s biggest banks may fall short of loan targets for the first
time in at least seven years as demand for credit wanes.
Caterpillar Inc. (CAT), the world’s largest maker of construction and
mining equipment, says sales in China have lagged behind expectations,
leading to a build-up of inventory.
Industrial output in China, the world’s biggest producer of steel and
cement, probably rose 9.8 percent last month from a year earlier, close to
the slowest pace in three years, according to the median estimate in a
Bloomberg News survey of 27 economists ahead of a National Bureau of
Statistics report due June 9.
Inflation may have moderated to 3.2 percent in May from a year earlier after
a 3.4 percent rate in April, a separate survey showed, the fourth month
consumer prices have risen by less than the government’s 2012 target of 4
percent.
Manufacturing Slows
China’s manufacturing expanded at the slowest pace in six months in May, a
government report showed on June 1, adding to signs the nation’s slowdown
is worsening. A separate purchasing managers’ index from HSBC Holdings Plc
and Markit Economics pointed to a seventh straight contraction, the longest
stretch since the global financial crisis.
The PBOC cut banks’ reserve requirements in November for the first time in
three years, and again in February and May, to spur lending.
Premier Wen Jiabao and the State Council, or Cabinet, pledged last month to
place greater emphasis on stabilizing growth after April industrial
production, new loans and exports were less than economists forecast. The
data prompted banks including Goldman Sachs Group Inc., Morgan Stanley and
Bank of America Corp. to cut their economic-growth estimates.
Expansion may drop to 7 percent or “slightly below” this quarter from a
year earlier, Tao Dong, a Hong Kong-based economist with Credit Suisse Group
AG said last month. Ding Shuang, a Hong Kong-based economist at Citigroup
Inc., forecast 7.5 percent. That follows an 8.1 percent expansion in the
first three months of the year, the fifth quarterly deceleration.
Tao said the government may respond with a stimulus of as much as 2 trillion
yuan, half the size of a package announced in late 2008 to cushion the
economy from the impact of the global financial crisis.
Even so, the official Xinhua News Agency said in a May 29 article that the
government has no intention of rolling out another “massive” stimulus,
damping speculation of more aggressive policies to support growth.
To contact Bloomberg News staff for this story: Bloomberg News in Beijing at
x*****[email protected]; Zheng Lifei in Beijing at l******[email protected] | o*0
发帖数: 408 | 2 re
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【在 v**********m 的大作中提到】
: China Cuts Interest Rates for First Time Since 2008
: By Bloomberg News - Jun 7, 2012 9:20 AM ET
: Timothy Bitsberger on China, Global Central Banks
: China cut borrowing costs for the first time since 2008 and loosened
: controls on banks’ lending and deposit rates, stepping up efforts to combat
: a deepening slowdown as Europe’s debt crisis threatens global growth.
: Enlarge image China Cuts Interest Rates to Boost Growth as Inflation Eases
: Members of China's military police force stand guard outside the People's
: Bank of China in Beijing. Photographer: Sim Chi Yin/Bloomberg
: China Rate Cut `Unsettling,' IoD's Leach Says
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