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The PBOC disappoints again

Despite calling on banks to nudge down borrowing costs, the PBOC stopped short of requiring that they lower the Loan Prime Rate (LPR) benchmarks this month. For now, policymakers are mostly relying on targeted measures to help support firms hit by the latest virus wave. The reluctance to embrace more wholesale easing suggests we shouldn’t expect a strong stimulus-led rebound of the kind we saw in 2020.

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