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26 Feb 2015
Further PBoC easing not likely – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Flemming Nielsen does not expect the PBoC incurring in further rate cuts in the upcoming periods.
Key Quotes
“The Chinese leadership probably does not see the need for aggressive easing at the moment, particularly if the target for GDP growth in 2015 is cut to 7.0% (in connection with the National People’s Congress in March) from 7.5% in 2014”.
“Nonetheless, People’s Bank of China (PBoC) still has an easing bias and we expect PBoC to cut the reserve requirement by at least 50bp, not least because recent capital outflows and intervention in the FX market have drained some liquidity in the interbank market”.
“We doubt the interest rate will be cut further and PBoC in our view is unlikely to start targeting a weaker CNY to support growth”.
Key Quotes
“The Chinese leadership probably does not see the need for aggressive easing at the moment, particularly if the target for GDP growth in 2015 is cut to 7.0% (in connection with the National People’s Congress in March) from 7.5% in 2014”.
“Nonetheless, People’s Bank of China (PBoC) still has an easing bias and we expect PBoC to cut the reserve requirement by at least 50bp, not least because recent capital outflows and intervention in the FX market have drained some liquidity in the interbank market”.
“We doubt the interest rate will be cut further and PBoC in our view is unlikely to start targeting a weaker CNY to support growth”.