HSBC remarks on People's Bank of China monetary policy
- PBoC to stay accommodative to support growth, using more new liquidity tools such as reverse repos and mid-term loan facility rather than cutting policy rate or reserve ratio
- Still likely to be 50-bp RRR cut in rest of 2016, no interest-rate cut; next year forecast is 50-bp rate cut and 200 bps cut from RRR
- Fiscal deficit as share of GDP likely to rise to 4% in 2017 from 3% in 2016 as fiscal policy does more heavy lifting to support growth
- Policy bank bond issues and sizable fiscal reserves give additional room
- Downside risk on weaker-than-expected property sector or external demand
With thanks to LiveSquawk for this (free trail available)
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I posted earlier on China and the signs of economic strength starting to gather pace .... well, early hints anyway:
- China economy showing signs of strength say early indicators for September
- Growth in export, recovery in power consumption will help to stabilize the growth in consumption