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.
RTFX Ltd (“RTFX”) is licensed to conduct investment services business by the Malta Financial Services Authority. This information does not constitute an offer or solicitation and is provided for information purposes only. This information shall not be deemed to constitute advice and should not be relied on as such to enter into a transaction or for any investment decision. Any opinions expressed in this document represent the views of RTFX at the time of preparation. They are thus subject to change without notice. RTFX believes that the information contained herein is accurate as at the date of publication. However, no warranty of accuracy is given by RTFX and no liability in respect of any errors or omissions, including any third party liability, are accepted by RTFX or any director, officer or employee.