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2 Mar 2015
Concerns over inflation prompted the PBoC to cut rates – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Signe Roed-Frederiksen argued the PBoC lowered its benchmark rates in response to worries about low inflation.
Key Quotes
“The People’s Bank of China cut the benchmark one-year lending rate by 25bp to 5.35% and the one-year benchmark deposit rate by the same amount to 2.5% on Saturday citing low inflation as the reason for easing policy”.
“The move came ahead of the release of the official manufacturing PMI, which improved slightly to 49.9 from 49.8 in January but continues to show contraction in the manufacturing sector”.
“The details in the survey were more positive though, and we still expect the Chinese PMIs to move moderately higher in coming months, supported by modest monetary easing, stabilisation of the property market and resilient exports”.
Key Quotes
“The People’s Bank of China cut the benchmark one-year lending rate by 25bp to 5.35% and the one-year benchmark deposit rate by the same amount to 2.5% on Saturday citing low inflation as the reason for easing policy”.
“The move came ahead of the release of the official manufacturing PMI, which improved slightly to 49.9 from 49.8 in January but continues to show contraction in the manufacturing sector”.
“The details in the survey were more positive though, and we still expect the Chinese PMIs to move moderately higher in coming months, supported by modest monetary easing, stabilisation of the property market and resilient exports”.