Central Banks
PBOC Has Scope to Cut Rates by Up to 50 Bps, Ex-Adviser Says
- Li Daokui says trade boom, capital controls allow for easing
- China’s monetary policy not as dependent on the US, Li says
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China’s central bank has space to cut its main interest rates by as much as 50 basis points over the next year if repeated Covid outbreaks continue to drag on the economy, according to a former adviser at the regulator.
Li Daokui said the People’s Bank of China can lower rates through the middle of 2023 as needed to alleviate corporate debt. The central bank shocked last week with a 10 basis-point cut to key rates as a property crisis and a stop-start reopening under Covid Zero deepened the economy’s slowdown.