Experts Expect The Central Bank To Increase Interest Rates In December Or Again.

　　 Experts predict Central Bank December or again Increase interest

According to the figures released by the people's Bank of China in November 26th, foreign exchange accounted for 519 billion 47 million yuan in October, a 30 month high and a 79.27% increase. Analysts pointed out that the recent US quantification Easing policy As a result, global liquidity is rampant and hot money accelerates into emerging economies, while RMB interest rate hikes and appreciation expectations attract more hot money to return to China.

If the situation continues, the legal deposit reserve rate may increase by 1.0-1.5 percentage points in the year, said Lu Zheng commissar, an economist at Xingye Bank.

In the first four months of this year, new foreign exchange holdings continued to operate at a high level, but in 5 and June, they fell sharply. In 7 and August, they increased again. From the sharp increase of new foreign exchange holdings in 9 and October, we can see that since the three quarter, foreign exchange funds have obviously recovered net inflows, while the renminbi has accelerated appreciation in the same period.

Since mid October, the central bank has been taking frequent measures to manage liquidity. In the four weeks from October 18th to November 14th, the central bank accumulated a net return of 153 billion 500 million yuan in the open market operation. In November, the central bank raised the reserve ratio for the two time, and the freezing of funds amounted to 600 billion yuan. Analysts said that the direct trigger factor for raising the reserve ratio is hedging huge foreign exchange reserves.

Lu commissar believes that under the strong rate hike expectations, the current agencies to avoid future losses, the enthusiasm of the central bank subscription is not high, resulting in the central issue of the central bank this week dropped to several billion yuan level, open market operation nearly loss of liquidity management capabilities. "To restore its liquidity management function, we must raise interest rates." Lu commissar expects that the central bank will increase interest rates between December 7th and -18.

Data show that as of the end of October, the central bank's foreign exchange balance was 21 trillion and 850 billion yuan, an increase of 2.49% over the end of 9. The high point of the monthly increase in foreign exchange is 525 billion 100 million yuan in April 2008.