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Central Bank Interest Rate Upward Pressure After Interest Rate Increase

2010/12/27 16:16:00 29

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Interest Rate Upward Interest Rate Upward Pressure

money market

The signal of policy anticipation is given.

At the beginning of last week, liquidity in the money market intensified.

Repo rate

Continue to surge across the board.

In December 23rd, the money market index interest rate, the seven day pledge repo weighted average interest rate, closed at 5.7125%, up 152.57BP from the previous trading day, and the base point was the largest in June 6, 2008.

At the same time, this index also hit a new high in October 26, 2007.

On the same day,

Bank of Shanghai

The weighted average interest rates of interbank offered rate (Shibor), overnight, 7 day and 14 day pledge repo were 3.2550%, 5.6617% and 5.1533%, respectively, up 70.17, 150.34 and 59.58 basis points respectively.

From the feedback of the repo market information, the central bank may introduce a move to raise the deposit reserve ratio or raise interest rates in the near future.

Analysts believe that the market will not overreact after the increase in boots, because the central bank's move is mainly to regulate inflation expectations.

China's CPI rose 5.1% in November, a 28 month high, and inflation has become a hot topic of concern from all sectors of society.

Raising interest rates will have a direct impact on the money market.

First of all, the central bank has two routine open market central issue operations every week.

Since the November low, the central bank has issued a continuous low volume of history, and the spread of the one or two tier market has continued to expand.

The issuance rate of the central bank has been flat since its slow pace in late October.

The 1 - year central bank has been flat for 2.3437% weeks in sixth consecutive weeks.

After raising interest rates, the interest rate of the central bank has more upward pressure.

However, because the spreads are still too large, the issue volume will not be enlarged too much.

Analysts believe that, compared with October 20th, the central bank's first interest rate increase on the bond market caused a storm type of yield increase, this increase in interest rates on bond market pressure will be relatively small.

Once the interest rate is raised, the interest rate hike is expected to be less than once.

The last increase in interest rates, the rate of return on interest rates is actually raised two to three interest rate increases in the future.

At present, the main factor affecting the yield of short debt is the change of capital side.

At the same time, raising interest rates will inhibit the recent downward pace of the long end of the yield curve.

The people's Bank of China announced on December 25th that it will raise the benchmark interest rate for Renminbi deposits and loans of financial institutions since December 26, 2010.

The benchmark interest rates for the one-year lending and lending rates of financial institutions were increased by 0.25 percentage points respectively, and the benchmark interest rates of other grades were adjusted accordingly.

This is the second increase in interest rates of the people's Bank of China since 2010. The last increase was in October 20th.