China is unlikely to loosen monetary policy until “early” 2012 “at the earliest” as consensus is to stop tightening, not to reverse course, according to BNP Paribas SA.
It will “take time” to form a new consensus for a policy turnaround, Ken Peng, an analyst at BNP, wrote in a report dated yesterday. Peng said the Central Economic Work Conference in December is a likely time for that decision.
“A high level policy debate is still needed before major policy changes could take place,” he wrote. “Policies that the market is strongly hoping for, cutting RRR or interest rates, would unlikely come out until early next year at the earliest.”
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