The Hindu Business Line : China's rate hike

This is with reference to "China's rate hike is just the beginning" (Business Line, November 2). Given the circumstances as elaborated in the article, the currency revision by China may not be prudent. However, China's growth of 9.1 per cent in the third quarter of 2004 is the slowest in more than a year after the introduction of lending curbs. The economy has still grown at 9.5 per cent in the first nine months of 2004.This should be the fastest in the world.

One feels the Bank of China's statement that the rate increase it is to address the recent conflicts and further consolidate the results achieved is too optimistic.

R. Hariharan

San Diego (US)

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