12 May 2015
Expect two more rate cuts by PBoC in 2015 – DB
FXStreet (Barcelona) - Economists at Deutsche Bank, predict that two more rate cuts, and one RRR cut in China this year, and further forecast Chinese growth to slowdown to 6.8% in Q2.
Key Quotes
“The PBoC cut 1 year benchmark deposit and lending rates by 25bp. The PBoC also lifted the ceiling of deposit rate to 1.5x of benchmark rate from 1.3x in the past. This rate cut is in line with our expectation.”
“We revise our interest rate call and expect two more cuts in 2015 -- the next cut in June and another cut in Q3. We continue to expect one more RRR cut in Q3.”
“We maintain our view that growth may slow to 6.8% in Q2, and rebound to 7.0% in Q3 and 7.2% in Q4. Risks to our growth outlook in H2 are tilted to the downside. We continue to expect growth to decelerate to 6.7% in 2016.”
Key Quotes
“The PBoC cut 1 year benchmark deposit and lending rates by 25bp. The PBoC also lifted the ceiling of deposit rate to 1.5x of benchmark rate from 1.3x in the past. This rate cut is in line with our expectation.”
“We revise our interest rate call and expect two more cuts in 2015 -- the next cut in June and another cut in Q3. We continue to expect one more RRR cut in Q3.”
“We maintain our view that growth may slow to 6.8% in Q2, and rebound to 7.0% in Q3 and 7.2% in Q4. Risks to our growth outlook in H2 are tilted to the downside. We continue to expect growth to decelerate to 6.7% in 2016.”