Central Banks
China Avoids Rate Cut to Keep Ammunition For Future Pressure
- PBOC drains net 1.15 trillion yuan through MLF in December
- Citic Securities sees room for the PBOC to cut rate, RRR
Source: Bloomberg
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China refrained from cutting the interest rate and drained the most cash since 2014 with a one-year policy tool, keeping its powder dry ahead of possible escalation in trade tensions with the US next year.
The People’s Bank of China held the interest rate on the one-year medium-term lending facility steady at 2% — a move predicted by nine of 10 economists surveyed by Bloomberg. The authorities also withdrew a net 1.15 trillion yuan ($158 billion) from the financial system with the tool, the most since 2014.