China Herald: Making sense out of PBOC´s policies

Financial analyst Sara Hsu tries to make sense out of the long list of policy changes the central bank, the People´s Bank of China (PBOC) has announced in the past year, under the Xi-Li government. "Right now, the opaque is becoming more transparent," she writes in The Diplomat.

Sara Hsu:

While the Xi-Li administration made it clear from the outset that they were pursuing financial marketization, it was unknown one year ago exactly how PBOC policy would seek to meet this general target. Now it is somewhat more transparent; the PBOC is carrying out major reforms every four months or thereabouts, with the first major move on July 22, 2013. The reforms truly are moving in the direction of financial liberalization, yet continue to control for risk.

Right now, the opaque is becoming more transparent; the general more specific, and one might assume that this will continue. To predict what major financial reforms may occur going forward, therefore, one must look back to the important meetings referenced in the statement above. The central government has already announced that the deposit rate ceiling will soon be lifted; according to this (very briefly established) pattern, this might take place in July, four months from now. We shall soon find out.

More in The Diplomat.

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