822 days ago • Posted by Paul de La Baume
China cuts rates in response to slowing growth #macro #markets #China
China's economy expanded 1.6% on a quarterly basis in 4th quarter of 2021. However, retail sales disappointed as they increased 1.7% year on year in December, versus the 3.8% expected, and down from 3.9% growth in November. With prices stable, China's central bank, the PBOC is shifting the focus to boosting economic growth. It responded with a rate cut this morning, lowering the interest rate on around USD110.2 billion worth of 1-year medium-term lending facility loans to some financial institutions by 10bp to 2.85%. The central bank also lowered borrowing costs of 7-day repos by 10bp to 2.10%. We believe it is likely the POBC will continue to act to support its economic growth, as it attempts to manage a soft-landing for its cooling property market. China's CSI 300 closed 0.86% higher today, but it is still down 13.6% from where it was a year ago.
