China Retains Borrowing Cost; Industrial Output Growth Eases
June 14 2018 - 1:48AM
RTTF2
China's central bank kept its short-term borrowing costs
unchanged after the U.S. Federal Reserve decided to hike its rate
for the second time this year.
Major economic indicators suggested a slowdown in economic
activity in May as lending curbs weigh on industrial activity.
The People's Bank of China, on Thursday, maintained the 7-day
reverse repo at 2.55 percent and the rate on 14-day tenor at 2.70
percent.
The benchmark one-year lending rate has been unchanged since
October 2015.
Industrial production climbed 6.8 percent but slower than the 7
percent increase logged a month ago, the National Bureau of
Statistics reported. The growth rate was expected to remain
unchanged at 7 percent.
Likewise, retail sales growth eased to 8.5 percent from 9.4
percent. Economists had forecast a faster increase of 9.6
percent.
During the January to May period, fixed asset investment
increased 6.1 percent compared to the expected increase of 7
percent. At the same time, property investment climbed 10.2 percent
annually in January to May period.
The surveyed jobless rate dropped marginally to 4.8 percent in
May from 4.9 percent in April.
The boost to industrial output growth from the removal of the
government's pollution controls at the end of March has now faded,
Chang Liu, an economist at Capital Economics, said.
And with headwinds from slower credit growth increasing,
economic growth looks set to continue to weaken in the second half
of 2018, the economist added.
Mao Shengyong, an NBS spokesman, said China's economic growth
remained stable. Nonetheless, uncertainties from external
environment have increased.
Further, he said the impact of the Fed's interest rate hike on
the Chinese economy is limited.
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