China is cautious on rates this time notwithstanding Fed lift

China is cautious on rates this time notwithstanding Fed lift

On Thursday, China's major financial institution left interest rates for open market operations intact, shrugging off an overnight soar in the Fed’s key policy rate.

The People's Bank of China didn’t provide comments on its rationale for keeping rates intact, after it followed a Fed lift within hours in March.

However, the Chinese Yuan is currently on steadier footing, while domestic liquidity conditions happen to be relatively tight.

Financial markets had been divided as for whether the PBOC would lift short-term rates once again in lockstep with the major US bank. By the way, China's short-term money rates along with bond yields have already been ascending.

Market participants pointed out that in June liquidity turns to be traditionally tight, and they still remember a cash crunch in 2013, which sent money rates up and shocked global markets.

The Chinese Yuan has ascended 2.3% so far this year, having dropped 6.5% last year.

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