China’s benchmark money-market rate rose on speculation that the central bank will lift interest rates this weekend, Bloomberg reported. The seven-day repurchase rate, which represents borrowing costs between banks, increased by 30 basis points to 2.5%, the largest gain since November 29. Simon Song, a China rates strategist at JP Morgan Chase, predicted benchmark rates will be lifted by a quarter of a percentage point this month. The People’s Bank of China (PBOC) raised banks’ reserve requirements twice in November and has already announced one interest rate increase. Economists surveyed by Bloomberg believe the central bank will lift one-year lending and deposit rates by a full percentage point by the end of 2011. China will hold its annual economic work conference on December 10-12, during which it will set monetary and fiscal guidelines for the upcoming year.
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