China's central bank unlikely to raise interest rates, Bloomberg survey shows



The People’s Bank of China will refrain from raising open-market interest rates even if the US Federal Reserve decides to increase borrowing costs next week, according to a Bloomberg survey.

More than 80 per cent of 32 economists, analysts and traders said that the PBOC will maintain its current rates on reverse-repurchase agreements, which guide the cost of funding in financial markets. Four forecast an increase of 10 basis points and one expects a hike of 15 basis points. The official benchmark rate for the broader economy has been on hold since late 2015.

Investors anticipate the Fed will boost its benchmark lending rate a quarter-point to a range of 1.25 to 1.5 per cent when it meets from Dec. 12. The PBOC refrained from raising borrowing costs in June after a Fed hike, a switch from March when it increased money-market costs hours after its US counterpart tightened.

Recovering sentiment on the yuan, the biggest yield gap in more than two years between US and Chinese 10-year sovereign bond yields, and still-moderate inflation offer ample breathing room for policy makers as 2017 comes to a close. Holding for now helps avoid market volatility too, as interbank rates have already risen strongly this year amid a renewed pledge to curb risks and tighten regulation.

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Still, abstaining from a rate increase fuels risks of yuan depreciation, especially in an environment where a prospective US tax cut may lead to some capital repatriation. Emerging-market portfolio flows turned sharply negative in late November in anticipation of the tax deal that emerged earlier this month, according to analysis by the Institute of International Finance.

China’s open market interest rates are becoming a de-facto benchmark, so moving it is "sensitive", said Shi Lei, chairman of Attractor Adviser, an advisory group in Shanghai. "China pays more attention to domestic economic fundamentals in terms of monetary policy. There’s no necessity for a hike as inflation won’t be very high next year, and the financial system is tightening," he said.

Even without an official interest-rate hike, interbank rates are likely to climb because of year-end demand, tougher PBOC oversight and macro-prudential policies. The nation’s seven-day repurchase rate -- the money-market benchmark -- will reach 3.1 per cent this month, according to the median estimate of economists in the Bloomberg Survey. That compares with an average of 2.89 per cent in November.

The year-long bond market rout is seen cooling though. The yield on 10-year China government bonds is likely to end the year at 3.9 per cent, and that on China Development Bank notes of similar maturity at 4.8 per cent, according to the median estimate, both around the current levels.

To be sure, as deleveraging efforts may intensify next year, the PBOC could increase market rates if officials consider that other policy measures, like macro-prudential policy, aren’t sufficient.

"Emerging market economies should also start monetary policy normalization and exit easing measures being put into place to deal with financial crisis," Sun Guofeng, director of PBOC’s financial research institute, said Tuesday at a forum in Beijing.

Mr Sun’s comments, along with the fact that the PBOC only rolled over half of the Medium-term Lending Facility maturing this month, indicate there’s a "high probability" that the central bank will follow the Fed by raising MLF interest rates, analysts led by Ming Ming at Citic Securities. wrote in a report on Thursday.

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

Results

6.30pm Madjani Stakes Rated Conditions (PA) I Dh160,000 1,900m I Winner: Mawahib, Tadhg O’Shea (jockey), Eric Lemartinel (trainer)

7.05pm Maiden Dh150,000 1,400m I Winner One Season, Antonio Fresu, Satish Seemar

7.40pm: Maiden Dh150,000 2,000m I Winner Street Of Dreams, Pat Dobbs, Doug Watson

8.15pm Dubai Creek Listed Dh250,000 1,600m I Winner Heavy Metal, Royston Ffrench, Salem bin Ghadayer

8.50pm The Entisar Listed Dh250,000 2,000m I Winner Etijaah, Dane O’Neill, Doug Watson

9.25pm The Garhoud Listed Dh250,000 1,200m Winner Muarrab, Dane O’Neill, Ali Rashid Al Raihe

10pm Handicap Dh160,000 1,600m Winner Sea Skimmer, Patrick Cosgrave, Helal Al Alawi

'Hocus Pocus 2'

Director: Anne Fletcher

Stars: Bette Midler, Sarah Jessica Parker, Kathy Najimy

Rating: 3.5/5

Directed: Smeep Kang
Produced: Soham Rockstar Entertainment; SKE Production
Cast: Rishi Kapoor, Jimmy Sheirgill, Sunny Singh, Omkar Kapoor, Rajesh Sharma
Rating: Two out of five stars 

The specs

Engine: 4.4-litre, twin-turbo V8
Transmission: eight-speed auto
Power: 617hp
Torque: 750Nm
Price: from Dh630,000
On sale: now

SANCTIONED
  • Kirill Shamalov, Russia's youngest billionaire and previously married to Putin's daughter Katarina
  • Petr Fradkov, head of recently sanctioned Promsvyazbank and son of former head of Russian Foreign Intelligence, the FSB. 
  • Denis Bortnikov, Deputy President of Russia's largest bank VTB. He is the son of Alexander Bortnikov, head of the FSB which was responsible for the poisoning of political activist Alexey Navalny in August 2020 with banned chemical agent novichok.  
  • Yury Slyusar, director of United Aircraft Corporation, a major aircraft manufacturer for the Russian military.
  • Elena Aleksandrovna Georgieva, chair of the board of Novikombank, a state-owned defence conglomerate.
History's medical milestones

1799 - First small pox vaccine administered

1846 - First public demonstration of anaesthesia in surgery

1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases

1895 - Discovery of x-rays

1923 - Heart valve surgery performed successfully for first time

1928 - Alexander Fleming discovers penicillin

1953 - Structure of DNA discovered

1952 - First organ transplant - a kidney - takes place 

1954 - Clinical trials of birth control pill

1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.

1998 - The first adult live-donor liver transplant is carried out

Expo details

Expo 2020 Dubai will be the first World Expo to be held in the Middle East, Africa and South Asia

The world fair will run for six months from October 20, 2020 to April 10, 2021.

It is expected to attract 25 million visits

Some 70 per cent visitors are projected to come from outside the UAE, the largest proportion of international visitors in the 167-year history of World Expos.

More than 30,000 volunteers are required for Expo 2020

The site covers a total of 4.38 sqkm, including a 2 sqkm gated area

It is located adjacent to Al Maktoum International Airport in Dubai South

Roll of Honour, men’s domestic rugby season

West Asia Premiership
Champions: Dubai Tigers
Runners up: Bahrain

UAE Premiership
Champions: Jebel Ali Dragons
Runners up: Dubai Hurricanes

UAE Division 1
Champions: Dubai Sharks
Runners up: Abu Dhabi Harlequins II

UAE Division 2
Champions: Dubai Tigers III
Runners up: Dubai Sharks II

Dubai Sevens
Champions: Dubai Tigers
Runners up: Dubai Hurricanes

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

UEFA CHAMPIONS LEAGUE FIXTURES

All kick-off times 10.45pm UAE (+4 GMT) unless stated

Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
Borussia Dortmund v Real Madrid

Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
Juventus v Olympiakos
Sporting Lisbon v Barcelona

Did you know?

Brunch has been around, is some form or another, for more than a century. The word was first mentioned in print in an 1895 edition of Hunter’s Weekly, after making the rounds among university students in Britain. The article, entitled Brunch: A Plea, argued the case for a later, more sociable weekend meal. “By eliminating the need to get up early on Sunday, brunch would make life brighter for Saturday night carousers. It would promote human happiness in other ways as well,” the piece read. “It is talk-compelling. It puts you in a good temper, it makes you satisfied with yourself and your fellow beings, it sweeps away the worries and cobwebs of the week.” More than 100 years later, author Guy Beringer’s words still ring true, especially in the UAE, where brunches are often used to mark special, sociable occasions.

Starring: Jamie Foxx, Angela Bassett, Tina Fey

Directed by: Pete Doctor

Rating: 4 stars


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