(18 April 2011 – Global) Markets around the world are on edge as concern deepens over China’s galloping inflation rate.Global investors were eyeing Chinese monetary authorities for a possible interest rate hike that could hit Australian markets.
Beijing reported that inflation touched 5.4 percent last month and government efforts to cool growth might need to be ramped up. This marked the fastest inflation rate since July 2008 – economists had expected a 5.3 percent rise.
At the end of last week, Asian stock markets were weak amongst fears of a move in interest rates.
‘The market is concerned the (Chinese) central bank may launch new measures even though the (consumer price index) data is in line with expectations,’ said Wang Liemin, an analyst at Guosen Securities in Shanghai.
With inflation hitting a 32- month high, a fifth rate rise in the space of 12 months could be inevitable.