- Recent Chinese economic data has undershot expectations, leading to speculation that China’s central bank may take steps to support activity levels.
- RBC Capital Markets thinks the bank is likely to cut a critical ratio for Chinese lenders, which would be a loosening of monetary policy.
- In a working paper released on Tuesday, the People’s Bank of China said the reserve requirement ratio should be cut to “ease burdens on financial institutions and smooth the interest rate transmission mechanism”, fuelling speculation that it could arrive imminently.
While financial markets have been focused on mounting trade tensions between the United States and China over the past week, thinks there may be a more pressing issue.
Lost in the trade war headlines, China’s latest batch of economic activity indicators were pretty weak in May.See the rest of the story at Business Insider
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