June 24, 2022 - 11:39 AM 294 views
According to an editorial in the 21st Century
Business Herald that cited research from the Bank for International
Settlements, "China's monetary policy should be aware of the trailing
effect and subprime mortgage concerns while focusing on stabilising prices and
the housing market" (BIS).
It would take three years for a 1% decrease in
nominal short-term interest rates to result in a 5% increase in house values.
However, the publication reported that the Chinese
real estate market is not currently experiencing such price increases. In 19
OECD nations, both the home price-to-rent and home price-to-income ratios are
higher than they were prior to the 2008 financial crisis, which is causing
developed countries to worry more and more about housing bubbles breaking.
Despite the BIS's warning, USD/CNY is currently down
0.05 percent on the day at 6.6943 as of this writing.
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