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China Seen Further Easing Monetary Policy as Growth Grinds Lower

  • Economists still see room for a RRR cut in 2015, survey shows
  • An extra benchmark lending rate cut is now forecast for 2016

China will add monetary stimulus next year, making good on a pledge to support growth as leaders push through policies to cut overcapacity and reliance on credit, according to economists surveyed by Bloomberg.

The People’s Bank of China will lower the benchmark one-year lending rate to 3.85 percent by the end of 2016 from today’s 4.35 percent, according to the median forecast of economists surveyed Dec. 17 to Dec. 22. Major banks’ reserve required ratio -- the proportion of deposits that must be locked away at the central bank -- will be 15 percent by the end of 2016, from 17.5 percent now, the survey showed.