- China’s Central Bank slashes its seven-day reverse repurchase rate by 10 basis points from 2% to 1.9%
- Onshore Chinese Yuan devalues by 0.25% to 7.1618 against the U.S. dollar
- Further monetary easing lies ahead of China as Central Bank cut deposit rates
People’s Bank of China revises monetary policies as the economy takes a hit
China is in for an easier time as the People’s Bank of China (PBOC) reverses key monetary policies. The bank cut a key short-term policy following disappointing data from the economy after the nation failed to rise as expected following the Covid-19 reopening.
PBOC has slashed its seven-day reverse purchase rate by 10 basis points, taking it from 2% to 1.9%. According to a press release by the bank, the move in jects 2 billion Chinese yuan ($279.97 million) through its seven-day repos.
This move marks the first time the Chinese government has made such a policy since August 2022. It comes ahead of the PBOC’s medium-lending facility interest rate decision that is slotted for June 15, 2023. The bank’s loan prime rate is also scheduled for release on June 20.
“Now we are going to see the Chinese [monetary] policy will become more supportive,” Atlantis’ Chief Investment Officer Yang Liu told CNBC’s “Street Signs Asia.”
“Basically what the Chinese government is [expected] to do [is] to try very hard to prop up the domestic consumption, especially in the private sector,” she said.