Sunday, May 3, 2015

2015-03 Interest Rate Trends

In March 2015, both the short-term state-sector and long-term private-sector interest rates decreased. The overnight Shanghai Interbank Offer Rate (Shibor) ended March at 3.18%, a lower rate than the 3.44% seen in February. However, the spread between March’s rate and the trailing average for March was 108 basis points, slightly higher than the gap seen in February. Even though the rate dropped month-over-month, it is still high for March.

The Wenzhou Comprehensive Index ended March at 19.00%. That is 74 basis points lower than February’s close. The spread between March’s number and the trailing average was -93 basis points, which is higher than the rate seen in February.

Both rates are dropping, but the long-term private sector rate is dropping faster than the short-term state-sector rate. The convergence trend seems to be continuing.