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Disappointing China Data May Further Weigh On LatAm FX

  • MNI (Beijing) The PBOC unexpectedly cut two key policy rates for a second time in three months Tuesday, as recent disappointing financial and economic indicators pointed to stronger headwinds. The central bank cut the rate of one-year medium-term lending facility by 15bp to 2.5% when rolling over the maturing CNY400 billion MLF with a renewed CNY401 billion facility. It also lowered the rate on the 7-day reverse repo rate by 10bp to 1.8%, while injecting a net of CNY198 billion via the instrument.
  • MNI (Beijing) China's production, consumption and investment slowed more than expected in July despite efforts to boost domestic demand, data released by the National Bureau of Statistics on Tuesday showed. Industrial production rose 3.7% y/y in July, underperforming the 4.3% forecast and decelerating from June's 4.4%. Retail sales increased 2.5% y/y in July to hit the lowest level this year, missing expectations for 3.8% and slowing from June's 3.1%.

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