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 ($US3.9 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 increase in US rates.
