Hot Topic at G20: When China Cut Interest Rates and RRR? Update: Today

Most interpret Zhou Xiaochuan's speech at the G20 as signaling easier monetary policy.

China CITIC International chief economist Liao Qun, said, "Two years ago the central bank has expressed a prudent monetary policy, this is only the official language, the reality does not conform to this presentation today will be expressed to sound a bit more relaxed, is the actual situation approach, also showed that this year is likely to continue further monetary easing. "he expects China to drop quasi four times, once cut interest rates, the main purpose is to steady growth.

Nomura's chief China economist in Hong Kong, Zhao Yang, said in a telephone interview, "sound a bit loose" description of reality, before the Chinese economy downward pressure is undervalued, especially the real estate market to the inventory pressure is very great. Partial easing monetary policy constraints on the economy is very small, before the central bank to ease monetary policy to let fear of skyrocketing housing prices, but now in addition to first-tier cities continued to rise outside, the four-tier cities prices are still significant downward pressure. Economic data released in early March if worse than expected, do not rule out the possibility of 50 points on March RRR; estimated annual RRR four times.

Minsheng Bank Li Zhiqiang, chief analyst also expressed a similar view. He said that in the context of the overall maintain an accommodative central bank operational tools both traditional drop prospective, there are directional flow tools.

"During the year is expected to drop quasi or fully visible, think twice the frequency, amplitude, a total of 100 basis points, in addition to MLF (medium-term lending convenient) at least such an amount will not be reduced, even slightly added," Li Zhiqiang expressed.

iFeng: 这个词在G20火了 中国要降息、降准

Update: China didn't wait to cut the RRR.

Reuters: China cuts reserve requirement ratio for fifth time since Feb. 2015
China's central bank reduced the amount of cash that banks must hold as reserves for the fifth time since February, 2015, as it seeks to revive a stumbling economy.

The People's Bank of China said on its website that it would cut the reserve requirement ratio by 50 basis points for all banks, taking the ratio to 17 percent for the country's biggest lenders.

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