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China's Raising Rates. Good for the Yuan, Bad for Bonds

  • First time PBOC starts tightening with money rates: NatWest
  • Bonds likely to suffer, yuan may be buoyed, analysts say
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PBOC Tightens Money Market Rates

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If China has a multi-speed economy -- with different regions performing at vastly different rates -- it may also be crafting a multi-speed approach to monetary tightening.

The central bank on Tuesday continued the campaign of tightening the nation’s money markets that it kicked off late last year, this time by refraining from offering reverse-repurchase agreements for a third straight day, draining funds from the system. At the same time, evidence emerged that new bank lending in January neared -- and might have beaten -- a monthly record, according to people familiar with the matter.