China Tells

The Fact that People’s Bank of China chose to raise the reserve ratio instead of the base rate is worth thinking (See Article from China Daily). On one hand it seems an immediate reaction to the potential sign of price increase (See Graph from Chinatells), on the other hand it seems that the central bank is reluctant to cause any misunderstanding from the market on their intention to call a quit of the liquidity. Such a mixture of message leads me to think when the Central Bank will seriously consider draining the pipeline. Another notable feature is that the Reserve Ratio actually is already at a relatively high level compared to ’07, during when the base rate was higher. An inverse of the situation at today implies that Central Bank is still allowing a loose monetary environment probably with the view that the economic recovery is still fragile and early.

央行突然决定提高存款准备金给各大市场带来了一定的震荡。各种猜测蜂拥而至，乐观者估计这只是纸老虎吓唬大家一下，悲观者已经看到股市房市崩盘的前景。目前看来央行基准利率维持不变，远低于存款准备金率，因此货币政策松弛的基调应该没有变化。从存款准备金率来看，央行连续上调的可能性也不是没有，因此只能解读为对市场发出的一个温和警告。