CLSA: China's Interest Rate Cycle Has Ended &Nbsp, Will Not See Again.

In May 16th, "we will not see the central government." Bank To increase interest rates, CLSA's China macro strategy analyst Luo Fuwan is based in CLSA. Investment The forum said above.

In April, CPI rose from 5.4% in March to 5.3%, and CPI inflation expectations weakened. Meanwhile, the PMI index fell in April, indicating that China's economic growth has slowed down. In the context of a marked slowdown in inflation and economic growth, the market is expected to weaken interest rates.

Merrill Lynch, senior Asia Pacific Region Economics According to Lu Ting, there is only one room for raising interest rates in 2011. Goldman Sachs said in April 5th the second time the central bank announced interest rate hike in the year, the rate hike cycle is coming to an end.

For the interest rate cycle has ended, Luo Fuwan explained that, on the one hand, inflation expectations have reached its peak. In view of the government's control of inflation, the central bank will not raise interest rates in order to control expectations instead of real prices. On the other hand, because banks have their own pricing power, the central bank's 55% loan is higher than the benchmark interest rate in the first quarter of this year, so interest rates are higher than real interest rates, and this will not increase interest rates.

Li Daokui, member of the central bank's monetary policy committee, said that the negative interest rate should be narrowed. In this regard, Luo Fuwan believes that Li Daokui pointed out that the reduction of negative interest rates should refer to deposit interest rates, loan interest rates will certainly not change.

In addition, up to now, the central bank has raised the reserve requirement ratio 5 times in 2011. Luo Fuwan said that the deposit reserve ratio has not ended. Every time the deposit reserve ratio is raised, it only offset the inflow of foreign exchange reserves, and the deposit reserve rate will continue. Unless the central bank feels that the reserve rate will not need to be raised any more, the process will stop.

Statistics Bureau data show that since 2011, CPI rose higher than last year, and CPI rose by 5.3% in April. Luo Fuwan said that due to the 2010 base number, the CPI rose earlier in early 2011. In addition, CPI will fall in the second half. Although inflation is relatively high in China, the income of Chinese people is increasing rapidly, that is, Chinese consumers are more capable of dealing with inflation than consumers in other countries, and the Chinese government of 3%-5% CPI can tolerate it.