The PBOC’s quarterly monetary policy committee meeting published a public summary commenting on recent conditions in markets such as the US, EU, and the Brexit situation, where it noted that ‘hidden risks in international financial markets have increased’. The remainder of the notice primarily repeated past boilerplates on maintaining growth, advancing reform, and keeping the CNY within a reasonable range.
Within that was a reiteration that the central bank will pay even more attention to ensuring the appropriate level of monetary policy looseness or tightness, and preserving appropriate liquidity conditions. IHS expects the PBOC will cut benchmark (now guidance) interest rates in July, likely coinciding or following soon after its GDP is reported on 15 July. IHS expects China’s GDP growth to slow from 6.7% in Q1 to 6.5% in Q2, due especially to unfavorable year-on-year comparisons in the financial sector
###