Yesterday, the Fed raised rates by 0.25%. A few hours later, Beijing lifted its 7-day and 28-day reverse repurchase agreements by 5 basis points. Bank of China: Only market adjustments. Attempt to limit the flow of capital out of the country.
Beijing (AsiaNews / Agencies) - The Chinese central bank raised its interest rates a few hours after the Fed raised rates for the dollar.
Yesterday, the US Central Bank raised rates by 0.25, taking "solid" gains for the US economy. The move, the third in a year, occurs after a period of very low rates to face the financial crisis.
Today, China lifted its 7-day and 28-day reverse repurchase agreements by 5 basis points. It is the first increase since last March. This choice seems to be in line with Beijing's attempt to curb the flow of capital from the country, in search of greater profits. The Chinese Central Bank has tried to downplay the move. In a statement it claims the established increase is only a market response to the Fed's decision, rather than a positive act by the Bank of China
The Hong Kong Monetary Authority also raised its interest rates to 1.75%. This is due to the fact that the exchange rate of the Hong Kong dollar is tied by a fixed percentage to the US dollar.