Goldman Sachs Group Inc. joined banks lowering their forecasts for China’s growth as Premier Wen Jiabao ’s campaign to rein in inflation restrains the world’s fastest-growing major economy.
Hong Kong stocks dropped, with the benchmark index sliding to a one-week low amid thin trading as retailers declined on concern the government will restrict visitors to the city.
Yuan forwards fell to the lowest level in three weeks after China’s central bank cut the onshore currency’s reference rate to the weakest since September.
China’s stocks listed in the U.S. retreated from a one-month high after the nation raised interest rates for the third time this year to tame inflation that has quickened to the fastest pace since 2008.
Asian stocks slipped for the first time in four days amid thin trading, after the regional equity index yesterday climbed to the highest level this year.
A Chinese manufacturing index dropped to the lowest level since February 2009, bolstering the case for fiscal or monetary loosening to support the expansion of the world’s second-biggest economy.
China’s benchmark money-market rate fell the most in three weeks after Premier Li Keqiang signaled more policy easing to counter an economic slowdown and the central bank stepped up fund injections.
China may limit interest-rate increases for the rest of this year as Premier Wen Jiabao bets that a slowing economy will help tame inflation after five moves since mid-October.
"This amount is roughly the same as a 50 basis point cut to the reserve-requirement ratio for the whole banking system on a static basis."
- Yu Song on Sep 16, 2014