China’s interest rates have decreased from 3.7% to 3.65% annually, a decrease of 0.05 percentage points. Central banks utilize the key rates as a tool to carry out interest rates. A decline in interest rates fights against a drop in prices or potential deflation. Additionally, it boosts exports and the economy as a whole. This is the first adjustment because the Central Bank cut interest rates by 0.1 percent to 3.7% on January 20, 2022.
Key information about China’s Interest Rate Policy
Following the most recent moderate interest rate increase by the US, analysts claim that China now has a window of opportunity to enact stronger monetary policies. They urge Beijing to take advantage of this opportunity to support the faltering economy amid easing overspill pressure and trying to slow rising prices.
- In November 2022, China’s interest rate was fixed at 2.75% pa, up from 2.75% pa in the previous month of October 2022.
- From January 2016 through November 2022, the China’s interest rates, which are revised monthly, averaged 3% per annum.
- The data peaked at 3.30% pa in October 2019 and fell to a record low of 2.75% pa in November 2022.
The 1-Year Nominal Lending Rate and the 7-Day Reverse Repurchase Rate are two additional important monetary policy rates of the Chinese People’s Bank.
Related information about China Interest Rate Policy
- According to the most recent data, China’s short-term interest rate for month-end SHIBOR over 3 months was 2.19% per annum in November 2022.
- In November 2022, the 10-year Treasury Bond Yield (Interbank: Spot Yield) for its long-term interest rate was quoted at 2.90% pa.
- In November 2022, the China-USD exchange rate averaged 7.18 (RMB/USD).
In October 2022, the authentic exchange rate was 147.08.
In terms of policy, authorities are on a very thin line. The yuan’s falls have quickened as a result of the PBOC’s decision to decrease key rates in August to boost credit demand and assist an economy hit by COVID shocks.