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Economic Research

Chinese Money Supply Growth Stays Elevated

Banks hoarded liquidity at the end of December in order to meet their regulatory requirements, pushing the seven-day repo rate to its highest level of the year. Additionally, the People’s Bank of China (PBoC) raised the required reserve ratio by 0.5 percentage point on December 10 and hiked interest rates by 25 basis points (bps) on December 25. Still, China’s money supply growth likely accelerated to 19.6% y/y in December as bank lending exceeded the RMB57.2 billion left in the 2010 quota of RMB7.5 trillion, and a[...]

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