Zhou Risks Turmoil With Easing of China Rate Controls
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China central bank Governor Zhou Xiaochuan faces an obstacle in his efforts to tame financial market volatility: his own plans to free up interest rates.
The benchmark money-market rate remains above the average for January even after the People’s Bank of China this week injected more than $62 billion following the biggest jump since June. At the same time, Zhou’s planned removal of interest-rate controls may make volatility tougher to prevent, with Standard Chartered Plc economist Stephen Green saying that crisis is a “rule of financial liberalization.”