18 Feb 2015
China slowdown could prompt further PBoC cuts – TDS
FXStreet (Edinburgh) - Analysts at TD Securities expects the PBoC to incur in further RRR cuts in order to pump more liquidity into the system.
Key Quotes
“Based on our analysis of various economic metrics, the PBoC will need to cut interest rates in order to give adequate support to the slowing economy”.
“It is our suspicion that Chinese officials are set to cut the required reserve ratio an additional 50 bps this quarter, which would add about $100 billion of liquidity”.
“But this is unlikely to be enough to move the Chinese economy onto an upward slopping growth trajectory—monetary base is at risk of eroding further owing to a reduced need to sterilized export revenues inflows by buying dollars”.
Key Quotes
“Based on our analysis of various economic metrics, the PBoC will need to cut interest rates in order to give adequate support to the slowing economy”.
“It is our suspicion that Chinese officials are set to cut the required reserve ratio an additional 50 bps this quarter, which would add about $100 billion of liquidity”.
“But this is unlikely to be enough to move the Chinese economy onto an upward slopping growth trajectory—monetary base is at risk of eroding further owing to a reduced need to sterilized export revenues inflows by buying dollars”.