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StanChart: PBOC's Relending Rate Cut Slightly Stronger Than Expected, But Not Necessarily Hint at Narrower Broad Easing Space in Future
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The People's Bank of China (PBOC) has cut the relending and rediscount rates by 0.25 ppts, a move slightly stronger than expected, given that relending rates are usually not adjusted independently without changes in policy rates like open market operations (OMO) or medium-term lending facility (MLF) rates, not to mention the adjustment magnitude, said Becky Liu, Standard Chartered's Head of Greater China Strategy and Head of Rates, GCNA, ASEAN, and South Asia. Liu also stressed that this targeted easing policy by the PBOC didn't imply a reduction in the potential space for broad-based easing, such as RRR cuts or reductions in OMO and MLF rates. The purpose of this move was to stimulate credit growth without further eroding the banking sector's NIMs and to lower the overall debt cost for banks. AAStocks Financial News |
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