World looks to China to act as circuit break for rout it started
The country's central bank may be the only one with the firepower to head off threat to global growth
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CHINA's central bank, which helped trigger a market rout with a surprise devaluation two weeks ago, may be the only one around the world with the firepower to arrest it.
With about 25 trillion yuan (S$5.5 trillion) of bank deposits still locked up as reserves and the benchmark one-year interest rate at 4.85 per cent, the People's Bank of China has an ample monetary policy arsenal at its disposal. Lending rates in the US, Europe and Japan already are close to zero and the rout is shaking confidence that the global economy will be strong enough to withstand an expected policy tightening by the Federal Reserve.
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