Mizuho’s Shen Says He Expects More China Reserve Ratio Cuts

Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd., comments on the People’s Bank of China’s announcement that it will cut the reserve requirement for the nation’s lenders by 0.5 percentage points from Dec. 5.

“There is a need for monetary policy loosening and recent capital outflow requires reverse sterilization. These made a reserve requirement cut a preferred policy option, in my view, despite repeated denial of policy loosening by policy makers before this cut.”

“I expect more cuts in coming months, probably once a month in the first half of 2012.”

To contact Bloomberg News staff on this story: Zheng Lifei in Beijing at Lzheng32@bloomberg.net Victoria Ruan in Beijing at vruan1@bloomberg.net

To contact the editor responsible for this story: John Liu at jliu42@bloomberg.net

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