Reverse repurchase is expected to continue to force the People’s Bank of China (PBOC) to claim that another RRR cut within the year is expected, China Securities Journal reported on Tuesday.
Additional takeaways
“On August 16, the central bank launched a 600-billion-yuan mid-term loan facility.”
“Experts believe that although the MLF volume continues to be reduced, the actual operation volume is higher than before. The forecast level of the institution.”
“In addition, another RRR cut is expected during the year, and the time point may be the fourth quarter.”
This comes as the Chinese industrial activity slowed more than expected in July. Chinese Retail Sales arrived at +8.5% YoY vs 11.5% expected.
Market reaction
USD/CNY remains on the bids amid growing China’s growth concerns, currently trading 6.4774, up 0.05% on the day.
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