China’s Central Bank Hikes rates by 50 basis points
The People’s Bank of China raised their Required Reserve Ratio by 50 basis points on Friday. This is the third time this year the Chinese Central Bank has raised its rates and the sixth time since November.
In a short statement following the rate hike, the PBOC said the increase will take effect from the 25th March.
EUR/USD traded up to 1.40982 after the release. AUD/USD was little changed but fell to 0.9900 after the rate hike. Australia’s trading ties with China usually make the Aussie vulnerable to any tightening in Chinese monetary policy, but with markets focused on a G7 intervention earlier today, there was very little impact on the Australian currency following today’s hike.
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