China witnessed the tightened nerve for interest-raise tightened once again today. The People��s Bank of China, the central bank of China, announced on Friday, the standard interest rate of deposits and loans for banking organizations is going to see a rise of 0.27 percentage point as from 29 October 2004 onwards.

"The increase rate of 0.27 percentage point " is lower than as guessed in the market but is still a heavy bomb on the financial market for this indicates the formal kicking off by the PBOC for marketing control of the finance. Moreover, some person of the trade revealed to the reporter, the interest-raise this time is the turning point of the PBOC policy, telling that China is to step into the interest-raise period.

Ever since this year the hue and din about the PBOC interest-raise has always been ringing in the ear. But previous opinions of some high-ranking officials and issuance of some economic data have made the differences in the economic circle wider on the result to be brought about by interest-raise. And so many of them hold that the interest-raise will be put back to the first quarter of next year.

The official saying from the People's Bank of China is like this: the macro-control this time has achieved a good result by using comprehensively the economic and legal means and the means of administration as well. It sees a continuous development of the operation of macro-controlled finance towards the orientation as expected. With regard to some contradictions and problems still remaining in the recent economic and financial operation the People's Bank of China after reporting to and approved by the State Council decided to raise the standard interest-rate of the people's currency in order to consolidate the result that the macro-control has previously achieved.

A related responsible person expressed, to raise the standard interest rate of the people's currency will be good for the economic pivot to play a further role in the resources disposition and in the course of the macro-control, good for preventing the enterprises from occupying or laying aside too much capitals, releasing the stringency of floating capitals for some enterprises and reducing the extra-corporeal capital flows. It is also good for optimizing the economic structure, raising the economic benefit and maintaining a favorable tendency for a continuous, speedy, harmonious and healthy development of the national economy.

The opportune moment for the interest-raise as chosen by the PBOC, internally speaking, is due to that the consumption price for residents has a clear indication of rising in the present price operation and an overall rising of the principal prices for grain and other necessities for life. Though the prices for means of production tend to go down a little bit yet the price-rise was quite obvious some time ago. Under the pressure of the price rise, the interest-raise has turned out a necessary means that must be taken into consideration in the macro-control for adjustment. And externally speaking, many countries in the world such as the US have also stepped into the interest-raise period.

So far as the Chinese citizens are concerned the interest-raise of the people's currency this time is good for the increase of their income from the deposit interest. And in the meantime the scale of interest-raise for medium-and-long-term deposits is bigger than the short-term one and so this is good for guaranteeing the interest income of residents from their medium-and-long-term deposits.

By People's Daily Online