Reuters (March 23)
“China is consciously uncoupling from Western peers on rates. Its central bank has held lending benchmarks steady as global peers slash…. The People’s Bank of China’s relative immobility has surprised many economists…. The spread between 10-year Chinese government bonds and U.S. Treasuries is nearly two percentage points, its widest since 2015.”
Tags: Benchmarks, Central bank, China, Economists, PBOC, Rates, Spread, Steady, U.S., Uncoupling, Western
Washington Post (August 2)
“China’s state-driven economic model has created many problems. Monetary policy isn’t one of them.” On the heels of the Fed’s rate cut, the ECB “looks poised to follow suit in September” and “the temptation is high for other central banks to fall in line.” But often they’re “canceling out each other’s efforts,” which is one reason the dollar didn’t fall with the latest rate cut. “Developed nations play out what is a zero-sum game.” In the process, they’re “using up the ammunition they have available to support their economies in the event of a downturn.” In contrast, the PBOC has avoided playing the rate cut game and “China’s 10-year government bond yield is relatively unchanged since the end of 2018.”
Tags: Canceling out, China Economic model, Developed nations, Dollar, Downturn, ECB, Fed, Monetary policy, PBOC, Rate cut, Temptation, Zero-sum game
Wall Street Journal (August 23)
“The People’s Bank of China is preparing to flood the banking system with liquidity to boost lending,” most likely by reducing the reserve-requirement ratio by half a percentage point. The planned move “signals that the Chinese central bank’s exchange-rate maneuvering in the past two weeks is backfiring, forcing it to again resort to the reserve-requirement reduction, the same easing measure that so far has failed to help spur economic activity.”
Tags: Backfiring, China, Easing, Exchange rate, Lending, Liquidity, PBOC, Reserve requirement
