China will lift the upper limits of the deposit rates for US and
Hong Kong dollars in commercial banks within the Chinese
territory.
The People's Bank of China (PBC), the country's
central bank, announced on Monday that the upper limits for
one-year deposits of US and Hong Kong dollars will increase 0.375
percentage points to 2.000 percent and 1.875 percent respectively
as at August 23.
Tian Yaling, an expert on foreign exchange, said the PBC's
decision is related to interest rate hikes imposed by the United
States Federal Reserve.
"The change reflects China's efforts to act in line with the
international community," Tian said, noting that the decision might
stoke the anticipation of a renminbi appreciation.
This is the third time this year that the central bank has
increased deposit rates for the two currencies. The first was on
July 22 when China initiated renminbi exchange rate reform.
PBC statistics show that deposits of foreign currencies
decreased by US$4.8 billion in July.
(Xinhua News Agency August 23, 2005)