China Seen Holding Key Rate Until 2024, Economists Say
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- Monetary policy plays ‘second fiddle’ to fiscal work: Pantheon
Commuters and shoppers in the Datang district of Guangzhou, China.
Photographer: Qilai Shen/BloombergChina will likely wait until early next year to cut policy rates to support the economy, though other forms of easing before the end of 2023 via trims to shorter-term rates or reserve ratios are still in the cards.
That’s according to the latest Bloomberg survey of economists, in which respondents said they see the rate on China’s one-year medium-term lending facility staying put at 2.5% by the end of the year, compared with the previous median estimate of a five basis point trim. Any reductions are instead likely to happen in the first quarter: 12 of 20 economists surveyed see the People’s Bank of China cutting the rate on its one-year policy loans then by five basis points or more.