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11 May 2015
Further rate cuts ahead in China – Westpac
FXStreet (Barcelona) - With China seeing a 25bp rate cut in its 1yr rates, the Westpac team sees a possibility of further easing towards 4.60% in the 1yr lending rate by year-end.
Key Quotes
“For the third time in 6 months the Chinese authorities announced a cut in interest rates. Effective from today the 1yr lending rate will be cut by 25bps to 5.10%, while the 1yr deposit rate will also be lowered by 25bps to 2.25%.”
“…the Nov 2014 and Feb 2015 rate cuts had little sustained impact on EM Asian currencies (let alone AUD) but that further easing is likely: Westpac looks for the 1yr lending rate to be at 4.60% by year’s end, while the required reserve ratio (RRR) is expected to fall to 16.5%, from the current 18%.”
“China Securities Journal said today there was still room to ease monetary policy.”
Key Quotes
“For the third time in 6 months the Chinese authorities announced a cut in interest rates. Effective from today the 1yr lending rate will be cut by 25bps to 5.10%, while the 1yr deposit rate will also be lowered by 25bps to 2.25%.”
“…the Nov 2014 and Feb 2015 rate cuts had little sustained impact on EM Asian currencies (let alone AUD) but that further easing is likely: Westpac looks for the 1yr lending rate to be at 4.60% by year’s end, while the required reserve ratio (RRR) is expected to fall to 16.5%, from the current 18%.”
“China Securities Journal said today there was still room to ease monetary policy.”