Wednesday, February 2, 2011

China Expected to Raise Rates Again this Month

China’s government, increasingly worried about soaring inflation, plans to continue tightening its money supply and will probably raise interest rates again within the mo
Although China’s economy is a little less than half that of the United States, its money supply is now one-quarter larger than America’s.
Depending on which inflation index is chosen in each country, and whether any adjustments are made for the consistent underestimates of Chinese inflation because of methodology problems, the real effective exchange rate measure shows that the renminbi is strengthening by 10 percent or more a year against the dollar.

Bolding mine. I had not heard that before.

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