RRR cut today, rate cuts tomorrow?

The People’s Bank (PBOC) has just announced a cut to the required reserve ratio (RRR) for most banks, shortly after Premier Li and the Politburo each separately hinted at an increase in policy support. There is already evidence of fiscal easing, and we expect policy rate cuts from the PBOC before long. That said, there still appears to be little appetite at the central bank for a sharp rebound in credit growth, and we’re seeing an opening of the fiscal taps, not a flood. This easing will cushion but not stop growth from slowing. Drop-In: China trade and the commodities demand outlook 08:00 GMT/16:00 HKT, Tuesday 7th December https://event.on24.com/wcc/r/3546145/A9D34EF592141BEFCAC819ADB40359D5?partnerref=report  
Julian Evans-Pritchard Senior China Economist
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PBOC takes a bigger bite of the easing apple

The People’s Bank (PBOC) has stepped up its efforts to loosen monetary conditions, following up last month’s reduction to the Loan Prime Rate (LPR) with cuts to the rates at which it lends to banks. Another LPR cut this month is now a given and we expect additional easing measures further ahead.

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