Chinese customers shop for radishes and other vegetables and fruits at a supermarket in Beijing, China, 11 December 2010. China risks a more abrupt
Image details
Contributor:
Imaginechina Limited / Alamy Stock PhotoImage ID:
W9BNDJFile size:
19.5 MB (1,014.1 KB Compressed download)Releases:
Model - no | Property - noDo I need a release?Dimensions:
2133 x 3200 px | 18.1 x 27.1 cm | 7.1 x 10.7 inches | 300dpiDate taken:
11 December 2010Photographer:
ImaginechinaMore information:
Chinese customers shop for radishes and other vegetables and fruits at a supermarket in Beijing, China, 11 December 2010. China risks a more abrupt tightening in monetary policy next year after refraining from raising interest rates since October even as inflation accelerated to the fastest pace in more than two years. Consumer prices jumped 5.1 percent in November, a statistics bureau report showed December 11. Even so, the central bank held off over the weekend on the rate move predicted by firms including UBS AG and Mizuho Securities Asia Ltd. Policy makers hesitation may be in part a product of Chinas policy of holding down the yuan, as higher returns on deposits and loans would boost prospects for inflows of speculative capital that put pressure on the exchange rate. The danger is that a quicker move to raise borrowing costs next year unsettles the expansion in the fastest-growing major economy. The only reason to hold back is the hot money issue, said Shen Jianguang, a Hong Kong-based economist for Mizuho who formerly worked for the International Monetary Fund and the European Central Bank. If they are overwhelmed by this concern and refrain from a rate hike, inflation will be a big risk next year, and then eventually they will need to rush in tightening.