Patrick Perret-Green, Singapore-based head of Asia foreign-exchange and rates strategy at Citigroup Inc., comments on China’s second interest-rate cut within a month, in a report published today.
“Clearly, the government is concerned about growth and the 30 percent allowable discount is very aggressive. It was previously 20 percent.
‘‘Theoretically, a bank could lend at 4.2 percent now. So, in theory, from where we were just a few weeks ago, the price of a one-year loan has fallen 240 basis points. This is likely to push the seven-day repo below 2 percent, to where it was before the tightening cycle began.’’