Look for a cut or a targeted cut
China continues to float stories about rate cuts in the domestic press. The latest is a report in the Global Times today that says the PBOC could cut the required reserve ratio (RRR) outright or use a targeted cut.
The report also talks about other tools:
Aside from a RRR cut, the PBC may be more willing to adopt tools like reverse repos, a targeted medium-term lending facility to release liquidity.
The analyst in the column also says to ignore a high CPI in the first half of the year because it will be associated with pork prices not underlying inflation.
At this point a cut should come as no surprise but should still help to boost sentiment when it comes.
Here's the full report.
