On Account of Steady and Fast growth, China’s Money Rate Plunges

China surviving the economic meltdown is now, employing a number of means to keep its economy fit and growing. According to the Chinese Premier, Wen Jiabao, the impact of financial crisis on China was very severe and to come out of that, the Government needs to pursue policies that should speed up the pace of growth of the economy.

On account of this news, China's benchmark money-market dropped, sliding the most in four months.

To ease the liquidity crunch, China's central bank injected cash into the financial system, which pushed the seven-day repurchase rate to a year-high of 3.28 percent on June 2. The cash availability with the banks was eased.

There is a drop of 11 basis points to 2.5 percent in the seven-day repurchase rate in Shanghai, according to the National Interbank Funding Center. Last week, it dropped by 54 basis points.

Agricultural Bank of China Ltd.'s initial public offering may not affect a change in the rate as expressed by Wen.

The People's Bank of China set the reference rate at 6.7733, compared with 6.7720 on July 2.

Yuan, though, was not much affected. It traded at 6.7743 per Dollar as against 6.7711 at the end of last week, according to the China Foreign Exchange Trade System. The currency has been allowed to trade against the Dollar by up to 0.5%.