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Chinese Central Bank to Raise Rates on Friday?

January 20th, 2010 Michael McDonough

My sources in China have notified me that a reputable Chinese business paper, the 21st Century Business Herald, has begun reporting on a market rumor that indicates the Chinese Central Bank may be planning a 27bp rate hike this Friday. I personally know very little about the paper, and believe this news is highly speculative. Many analysts do not anticipate a move by the Chinese Central Bank until the Fed begins to hike in order to avoid an inflow of speculative capital. However, considering the recent pace of Chinese tightening this rumor can not be completely discounted.  After yesterday’s sell-off it will be very important to pay attention to any developments stemming from this story. After receiving the news I spoke with some money managers on the ground in China, and their first reaction was given what is presently available “it’s hard to comment”.

The Original Article (in Chinese):

http://www.21cbh.com/HTML/2010-1-21/163154.html

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