December 10 – Financial Times: “China looks increasingly under siege as it fights pressure to revalue its currency. Exporters are bringing back ever bigger dollar receipts and banks, according to the Bank of International Settlements, are repatriating funds and seeing more domestic deposits. The build-up of pressures is evident in gently rising prices and annualized money supply growth running at about 21 per cent. Now one of China’s favourite tools to stem the tide – short-term bills used to sterilize foreign exchange intervention – appears to have been blunted. China, given it inflexibility on currency revaluation and interest rates, has relied heavily on sterilization bills, issuing some Rmb600bn worth since April. But buyers, deterred by the modest yields on offer, are shunning the paper. Other measures to control the money supply have had mixed success.”
December 10 – Bloomberg: “China’s money supply grew faster than the central bank’s targeted rate for an 11th straight month in November, which may prompt the authorities to take additional action to curb lending in coming months. M2, the broadest measure of money supply rose 20.4 percent from a year earlier to 21.6 trillion yuan ($2.6 trillion), after climbing 21 percent in October, the People’s Bank of China said.”
December 12 – Bloomberg: “China’s consumer prices rose 3 percent in November from a year ago, the fastest rate of inflation in 6 1/2 years, after wheat and soybean shortages drove food prices higher. The biggest increase since April 1997 followed a 1.8 percent climb in October… Food costs, which account for about a third of the index, rose 8.1 percent.” |
