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People calm about interest rate hike

04-09-2011 12:56 BJT

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The Central Bank of China raised the benchmark one-year borrowing and lending interest rate by 25 basis points Wednesday. It's the second this year, and the 4th in 6 months.

Many believe that this cycle of interest rate rises is just the beginning. How will this tightened monetary policy affect people's saving habits?

During the morning of a normal working day, we visited a commercial bank to see how people are reacting towards another round of interest rate rises. In February, when the central bank raised the interest rate, a lot of people rushed to the bank to withdraw their deposits and open new accounts. But this time, people appear to be calmer about the changes in interest rates.

Customer, said, "I'm not so sensitive about the rise in interest rates."

Customer, said, "If the interest rate keeps rising, I will definitely save more money in the bank."

Customer, said, "Higher rates will have some impact on my savings. I have a clear idea of the deposit terms and revenue. The country is calling on people to invest properly and I don't think it's a good idea to close the current deposits accounts and open new ones at higher rates."

In the past couple of months, the Central Bank has raised the interest rate almost every 2 months. People are now getting used to the rises and are acting more rationally about their money. Short-term financial products have now become a hot investment choice for customers.

Customer, said, "I don't think it will change my saving habits. I bought a financial product at an interest rate of 4.5%. I've always had this product."

Customer, said, I don't want to withdraw my current deposits and open new ones. I mainly buy financial products. With the interest rate going up, the interest rates of these products rise too. I think it's a good thing for our investors.

Zhang Ran, Customer Relations Mgr. Industrial & Commercial Bank of China, said, We're now entering an interest rate hike cycle, people expect that there will be more rises in the near future and in the second half of the year. So customers are now willing to choose financial products with a period of 3 or 6 months. People now prefer these kind of short term products.

Higher interest rates may reduce the demand for mortgages. But investors seem to have their own ways of managing their money.

Zhang Ran, Customer Relations Mgr. Industrial & Commercial Bank of China, said, The government is doing a lot to cool the property market. As for the customers, they are now putting their money they previously intended to invest in the property market into the stock market and also gold market.

 

 

Editor:Zhang Pengfei |Source: CNTV.CN

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