In its latest China market analysis, Goldman Sachs (GS) cites challenges to the growth should the world’s second-largest economy adheres to nationwide lockdown due to the South African covid variant, namely Omicron.
“China's nominal economic growth could plummet to 1.5% this year if it reintroduces a nationwide lockdown due to the Omicron variant,” said GS.
Key quotes
China maintains a meaningful current account surplus.
Also helping would be solid net portfolio inflows driven by index inclusions and a potential acceleration in equity purchases by foreigners with domestic stocks likely performing better this year than last.
FX implications
USD/CNY takes the bids to refresh intraday high around $6.3830 by the press time of early Friday morning in Asia.
Read: China may ease monetary policy in Q1 despite hawkish Fed, and that's AUD/USD negative
