Phillip Securities’ Wong Says Cut May Precede Bigger CPI Drop

June 7 (Bloomberg) -- Louis Wong, director at Phillip Securities HK Ltd., comments by phone on China’s decision to cut interest rates for the first time since 2008.

“I think it is part of the stimulus package to prop up the economy but the market is a bit caught by surprise of the timing, that it comes ahead of the release of the CPI economic data. It may indicate that there is a bigger drop in the CPI.”

“It goes to show that cutting the reserve requirement ratio may not be sufficient to stimulate the economy, so now they have resorted to cutting interest rates.”

“The Australian central bank has cut interest rates so China wants to keep up with other central banks in terms of monetary easing.”

To contact the reporter on this story: Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

To contact the editor responsible for this story: Nicholas Wadhams at nwadhams@bloomberg.net