China’s central bank raised an interbank short-term borrowing interest rate yesterday afternoon, Caixin Global reports, a day after the US Federal Reserve announced it will hike its key lending rate.
The interest rate on seven-day reverse-repurchase agreements was increased by 5 basis points to 2.55%, but more significant benchmark interest rates were kept intact by the PBOC.
The Fed on Wednesday hiked the target range for federal funds rate by 25 basis points to 1.5%-1.75% following a more positive outlook for the US economy.
This is the third time since March 2017 that China’s central bank has seemingly followed the US in raising rates, most likely in a continual effort to keep the yuan from dropping and prevent capital outflows.