Whenever People's Bank Of China Do Something

I was curious. 

I wanted to know what the monetary tightening by People’s Bank of China has done to the market. 

Using Shanghai Interbank Offered Rate (SHIBOR) as a guide, comparing the SHIBOR curves before and after the announcements so far being made in 2011, the results of monetary policy tightening on market interest rates are mixed at best.

18 March 2011

50 basis points increase in Reserve Requirement Ratio (RRR):

chart

Source: SHIBOR

18 February 2011

50 basis points increase in Reserve Requirement Ratio (RRR):

chart

Source: SHIBOR

8 February 2011

25 basis points increase in interest rates:

chart

Source: SHIBOR

14 January 2011

50 basis points increase in Reserve Requirement Ratio (RRR):

chart

Source: SHIBOR

Despite the apparent mixed and sometimes erratic immediate results, two things do seem to have headed to the right direction over time.  Both 6-month and 1-year SHIBOR have been rising:

chart

Source: SHIBOR

This article originally appeared here: Whenever People’s Bank of China Do Something…
Also sprach Analyst – World & China Economy, Global Finance, Real Estate

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