19 Jan 2015
PBoC continuing its easing, might cut rates again in Q2 – Nomura
FXStreet (Barcelona) - Analysts at Nomura note that PBoC is continuing its stealth-like, targeted easing, and further anticipates that China might see one more interest rate cut in Q2.
Key Quotes
“The People’s Bank of China (PBoC) will increase its re-lending facility by RMB50bn to support loans to the agriculture sector (RMB20bn) and small and micro-enterprises (RMB30n), according to its website. The outstanding re-lending facility was RMB267.8bn at the end of 2014, up by RMB99.4bn from 2013.”
“This suggests to us that the PBoC is continuing its stealth-like, targeted easing, the potency of which remains questionable given the powerful headwinds to growth.”
“We expect more policy-easing measures, including an across-the-board 50bp cut to the reserve requirement ratio in each quarter of 2015 and one more interest rate cut in Q2.”
Key Quotes
“The People’s Bank of China (PBoC) will increase its re-lending facility by RMB50bn to support loans to the agriculture sector (RMB20bn) and small and micro-enterprises (RMB30n), according to its website. The outstanding re-lending facility was RMB267.8bn at the end of 2014, up by RMB99.4bn from 2013.”
“This suggests to us that the PBoC is continuing its stealth-like, targeted easing, the potency of which remains questionable given the powerful headwinds to growth.”
“We expect more policy-easing measures, including an across-the-board 50bp cut to the reserve requirement ratio in each quarter of 2015 and one more interest rate cut in Q2.”