The lack of any reduction to policy rates today, despite the clear economic case for doing so, underscores the extent to which the PBOC remains constrained by concerns about bank profitability and declining long-term bond yields. Although we do expect some monetary easing over the coming quarters, it is likely to remain modest in scope and insufficient to drive a turnaround in private sector demand.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.